Judicial review of a decision of a public authority can be an expensive business, especially as an unsuccessful petitioner is usually liable for a substantial proportion of the respondent's legal expenses. This risk was often seen as inhibiting individuals and non-governmental organisations (NGOs) such as environmental groups from challenging a decision to grant planning permission.
The Public Participation Directive  requires that members of the public have access to a legal review procedure to challenge the legality of decisions subject to the Directive. In addition to other criteria such a procedure must not be "prohibitively expensive". In Scotland this led to the development of Protective Expenses Orders (PEOs), initially at common law but from March 2013 formalised in a new Chapter 58A of the Court of Session Rules of Court.
A PEO is a court order, available to individuals and environmental NGOs, which caps a petitioner's liability for the expenses of the respondent public authority in the event that the legal challenge is unsuccessful. If granted, the petitioner's liability for such expenses is capped at a maximum of £5,000. There may also be a cross-cap, in the event that the challenge is successful, which limits the respondent's liability for the petitioner's expenses to a maximum of £30,000. Essentially, the purpose is that an individual or NGO should not be deterred from initiating a challenge to a relevant decision because of the risk of having to pay large and unknown expenses if the court is unsuccessful.
However, in a recent judgment the Court of Session refused to grant a PEO to Friends of Loch Etive (FoLE), the petitioner in a judicial review of a decision by Argyll and Bute Council to grant planning permission for a fish farm on Loch Etive. FoLE, a registered charity, was a NGO promoting environmental protection, and had disclosed only £4,000 in its bank account. FoLE submitted that it satisfied the Chapter 58A requirements and applied for a PEO.
From the evidence made available to the Court it was apparent that FoLE had been created by a local landowner who objected to the proposed fish farm, was controlled by the landowner and his family as trustees of FoLE, and had been almost entirely funded by the landowner. No information was provided on the landowner's personal financial resources, although it was apparent that he had already funded FoLE to the tune of £70,000, or on donations that might be expected from other people who supported FoLE's campaign.
In these circumstances Lord Malcolm declined to award a PEO. The judgment highlights that Rule 58A.2(5) requires the Court to be satisfied that a petitioner cannot reasonably proceed with the petition in the absence of a PEO. The individual landowner's effective control of FoLE and the history of FoLE funding meant that this test had not been satisfied. As Lord Malcolm states "[i]t would always be open to an individual, whatever his resources, to obtain a protective expenses order by setting up a charitable organisation in which he controls its activities and membership". 
This situation will not be applicable to most environmental NGOs, and the Court will interpret the new Rules in accordance with the underlying purpose of the Directive. However, the case demonstrates that PEOs are not without limitations. In assessing whether a petition could reasonably proceed without a PEO the Court must assess the financial resources available to the petitioner. Where such information is not provided, or it appears that a NGO is controlled by another party of undisclosed or substantial means, the Court may decline to make an award.