Summary

The Ministry of Justice (MOJ) is proposing that a claimant’s liability for the defendant’s costs in judicial review cases that involve environmental issues be capped at £5,000 (or £10,000 if the claimant is an organisation). Similarly, a cap of £35,000 will apply with regard to a defendant’s exposure to a claimant’s costs where the claimant is successful.

The proposal is contained in the government’s response to its 2011 consultation: ‘Costs Protection for Litigants in Environmental Judicial Review Claims’.

Recipients of planning permissions subject to environmental impact assessment and other environmental regulatory consents should be aware that the proposal may increase the risk of legal challenges to their grant.

Background

In the UK, costs usually ‘follow the event’ so that the losing party is usually required to pay some, if not, all of the successful party’s legal costs. This can act as a brake on the bringing of litigation by individual claimants.

In the environmental law context the EU and its member states have signed up to an international treaty, the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (the Aarhus Convention), which seeks to ensure all citizens are able to obtain access to justice through the courts in relation to environmental matters. Further, this access is required to be at a reasonable cost, and not prohibitively expensive.

Both the Aarhus Convention Compliance Committee and the European Commission have expressed their opinion that the current costs rules in the UK do not comply with the requirements of the Aarhus Convention, preventing UK citizens from enforcing their environmental rights before the Courts. The consultation was therefore designed to assess what further measures are required to be taken to bring the UK into compliance.

The proposal

The MOJ is proposing to codify the existing Protective Costs Order (PCO) regime, which is designed to limit the exposure of claimants to defendant’s costs. The court will be able to grant a PCO to the claimant before permission for judicial review is granted, provided the claim is within the scope of the Aarhus Convention. They will not therefore be dependent on permission for judicial review being granted, as the MOJ had initially suggested. This stems from concern among NGOs that, although rare, it is possible to incur significant costs before permission is granted.

The MOJ had recommended a uniform cap on a claimant’s liability for costs at £5,000. Following the consultation, it felt that the cap should be higher where the claimant is an organisation; in this case the cap will be £10,000. Many respondents to the consultation (mainly NGOs or legal practitioners) suggested that the cap should be around £2,000-3,000, arguing that a risk of paying £5,000 was still prohibitively expensive for many potential litigants.

The recommended cap on the defendant’s liability has also been raised from the original consultation proposal of £30,000, to bring it in line with current case law.

The caps will be fixed; there will be no provision to alter or remove either cap. Although the original consultation suggested that the cap would be removable in exceptional circumstances, the MOJ takes the view that there will not be sufficient circumstances for the cap’s removal to justify the uncertainty and possible complications in the majority of cases.

For cases that go to appeal, the MOJ proposes that the judge considering permission to appeal should also determine the appropriate costs limits having regard to the decisions in the lower court. This follows the rule for fixed costs regimes proposed by Lord Justice Jackson in his review of civil proceedings.

Way forward

The MOJ plans to implement the proposals through amendments to the Civil Procedure Rules later this year. The proposals will be put to the Civil Procedure Rule Committee for consideration as soon as possible.

The consultation responses also expressed concern that the caps would not apply to certain statutory procedures relating to environmental matters. The MOJ plans to consider this issue further in the future.

Impact

There is understandable concern that decreasing the risk of incurring a costs liability in the event that an unmeritorious claim is pursued may lead to many more environmental judicial review claims. The requirement to apply to the Court for leave to apply for judicial review will however continue to act as a constraint to the bringing of weak claims.

The cap on the ability to recover costs may also affect the way the public bodies granting planning permissions with an environmental dimension and other environmental regulatory consents manage the defence of judicial review cases, particularly in the present financial climate where the emphasis is on reducing public spending. This is likely to put further pressure on the recipient/beneficiary of the planning permission or consent to participate in such proceedings, as a party directly affected, in order to ensure that both sides of the argument are properly aired.

The new rules do not appear to affect the position of a third party participant in a judicial review case. It will still be possible for a third party to incur a liability for costs, and also to recover its costs, although both of these occurrences are relatively rare; an interested party will usually not be able to recover its costs, for example, unless it can show that it has brought something to the proceedings (eg, evidence on a specific technical point) that could not have been covered by the principal parties. It is highly unlikely, however, that the Court would be willing to make a costs order where either the claimant or defendant has the benefit of a PCO.