The Queen (on the application of (1) ROYAL SOCIETY FOR THE PROTECTION OF BIRDS (2) FRIENDS OF THE EARTH LTD (3) CLIENT EARTH (Claimants) v (1) SECRETARY OF STATE FOR JUSTICE (2) LORD CHANCELLOR (Defendants) & another  EWHC 2309 (Admin)
In 1998 the UK, the European Union and other European countries entered into the Convention on Access to Information, Public Participation in Decision Making and Access to Justice in Environmental Matters (the “Aarhus Convention”). The aims of the Aarhus Convention include expanding access to justice in environmental matters for individuals and non-governmental organisations to challenge the legality of acts, omissions or decisions affecting the environment (Articles 9(2) and (3)). In order to achieve wide access to justice in environmental matters, Article 9(4) of the Convention requires all Parties to ensure that the relevant legal procedures provide adequate and effective remedies and are not “prohibitively expensive”.
The Aarhus Convention came into force in 2001 and whilst not directly effective into UK law, compliance with the Convention became judicially reviewable in domestic courts by means of two EU Directives (the Environmental Impact Assessment Directive and the Industrial Emissions Directive). The jurisprudence of the Court of Justice of the European Union (“CJEU”) (Lesoochranárske zoskupenie VLK v Ministerstvo zivotného prostredia Slovenskej republiky (Case C-240/09)) further expanded the possibility to review domestic compliance with Article 9(4) of the Aarhus Convention to any judicial proceedings pertaining to rights or obligations covered by EU environmental law.
Prior to April 2013 the Courts’ jurisdiction to provide costs protection in environmental law cases in England and Wales was exercised in line with the general principles set out in the case of R (Corner House) v Secretary of State for Trade and Industry  1 WLR 2600 (the “Corner House Principles”), which applied to challenges by way of judicial review that were considered to be in the public interest and of general public importance. The reliance on the Corner House Principles as an adequate means to implement Article 9(4) of the Aarhus Convention in UK law was put into question by a number of subsequent rulings, including a CJEU reference (R (Edwards) v Environment Agency (No2) C-260/11) and the CJEU ruling in Commission v United Kingdom (C- C-530/11). These found the Corner House Principles to be overly stringent and to provide insufficient certainty to claimants as to the quantum and liability for costs in environmental cases (the “reasonable predictability principle”).
Further to the above CJEU rulings, in April 2013 changes were made to the Civil Procedure Rules (“CPR”) with a view to introducing automatic costs protection by way of fixed-cost caps for unsuccessful claimants in judicial review proceedings falling within the scope of the Aarhus Convention. The new regime again came under scrutiny in Venn v Secretary of State for Communities and Local Government  EWCA Civ 1539, where the Court noted that the failure to extend the new costs regime to statutory reviews put the UK Government in breach of Article 9(4) of the Aarhus Convention. As a result, the Government took the opportunity to further review the Aarhus costs protection regime by way of amendments to the CPR that came into force at the end of February 2017 (the “2017 Amendments”).
Whilst extending the CPR Aarhus costs regime to statutory reviews, the 2017 Amendments also moved away from the fixed-cost caps regime towards a hybrid model which subjected the existing cost caps to:
1. A requirement to file and serve a schedule of the claimant’s financial resources that takes into account any financial support which any person has provided or is likely to provide to the claimant (CPR 45.42); and
2. A Court power to vary the standard cost caps if satisfied that to do so would not make the proceedings prohibitively expensive (or the failure to vary the costs cap would make the costs of the proceedings prohibitively expensive) (CPR 45.44).
Three environmental NGOs challenged the legality of the 2017 Amendments before the Administrative Court by way of judicial review on the following grounds:
1. The Court power to vary the costs cap at any point of the proceedings may have a significant “chilling effect on meritorious claims” in that it provides no certainty for claimants at the outset as to their potential costs liabilities throughout the legal proceedings. As such it falls foul of the reasonable predictability principle set out in the CJEU ruling in Commission v UK.
2. The failure to make specific provision for private hearings when a claimant or a third party financial details may have to be examined to consider applications for variations of the Aarhus default costs caps may have, again, a “chilling effect” on potentially meritorious claims that may otherwise be brought, for instance, by an organisation that is unwilling to publicly disclose the identity of its donors.
3. The Court should make a declaration to the effect that in the context of the Court’s assessment of whether or not proceedings are “prohibitively expensive” a claimant’s own costs of bringing the claim (rather than merely the claimant’s liability for the defendant’s costs) should be a relevant matter to be taken into account in assessing whether the default costs caps are appropriate.
Ground 1 – Whilst accepting that it would have been beneficial for CPR 45.45 to specify that any application to vary the default costs caps should be made at the beginning of the proceedings with the acknowledgment of service, Mr Justice Dove concluded that as a matter of practice a Court would always expect any dispute over the level of costs caps to be raised at the earliest possible stage of the litigation. Despite the theoretical possibility to make such an application at any stage of the proceedings, therefore, a Court would not entertain such an application at a later stage without good reason – such as a change in the financial circumstances of the claimant or evidence of untrue or misleading statements having been made in the claimant’s schedule of financial resources. Ground 1 was therefore dismissed on the ground that the mere existence of the opportunity of reassessing the costs caps does not render the whole costs regime incapable of providing reasonable predictability.
Ground 2 – In line with the claimants’ submissions, Mr Justice Dove concluded that the CPR included insufficient safeguards to reassure potentially meritorious claimants that confidential financial information and, in particular, information as to the identity of third party donors will not find its way to the public domain. The result is a potential “chilling effect” on claimants and/or their financial supporters’ propensity to bring meritorious environmental claims, in breach of the requirements to ensure wide access to justice set out in the CJEU jurisprudence. CPR 39PD (paragraph 1.5) will therefore have to be amended to make express provision for hearings in relation to disputes over the variation of cost caps in Aarhus cases to be heard in private.
Ground 3 – Whilst agreeing that a claimant’s own costs of bringing the claim is a relevant matter to be taken into account in assessing whether the default costs caps are appropriate, Mr Justice Dove concluded that declaratory relief was unnecessary in that the Court’s endorsement of that principle already did everything which might be accomplished by a declaration.
While the above ruling may be seen as yet another blow to the Government’s complex history of implementation of the Aarhus Convention costs principles in the law of England and Wales, the further amendments to the CPR that will be required to give effect to Mr Justice Dove’s ruling are minor and largely in line with what appears to have been the original intention behind the 2017 Amendments, as set out in the Government’s response to the 2015 public consultation on those amendments.
At the same time this ruling provides a number of reassurances that will undoubtedly be welcomed by environmental NGOs and prospective individual claimants, including that:
- Once cost caps are fixed they will not be subject to further review other than in limited circumstances
- In assessing the costs caps all costs, including the claimant’s own legal costs, will be taken into account
- All hearings involving the disclosure of confidential financial information or information on the identity of third party donors will be held in private
We look forward to seeing the Court’s Order following the parties’ further submissions as to what relief should flow from the judgment.