The Government has published its response and outline proposals to the consultation on Cost Protection for Litigants in Environmental Judicial Review Claims. As many legal practitioners already it is clear from the responses that the current costs regime creates a chilling effect on potential environmental claimants. At worst, concerns about costs liability could deter up to half of arguable claims from going forward. This highlights the need for a system that ensures all costs, not just the costs of the other side, are not “prohibitively expensive.” It is however arguable that the proposed PCO regime falls short of providing this protection.

The Government’s proposals, which are to be submitted to the Civil Procedure Rule Committee for inclusion in the December 2012 amendments, are:

  • The PCO regime will apply from the time the claim form is issued, provided that the claim form states that it is an Aarhus case and provides reasons. If the application for permission is unsuccessful, liability for the Defendant’s Mount Cook costs1 will be capped at £5,000.
  • The recoverable costs under the PCO regime will be fixed at £5,000 for an individual claimant, £10,000 for an organisation and there will be a cross-cap on the Claimant’s recoverable costs of £35,000. These caps will not be subject to challenge or variation. In practice, this is a fixed-costs regime.
  • When considering whether to grant permission for the claim to proceed, the Judge will consider what the appropriate level of cap should apply. This matches the proposals by Lord Justice Jackson for appeals in cases that have been subject to a fixed costs regime in the court below.

Less than one third of the 22 consultation responses supported a cap of £5,000. The £10,000 cap for organisations is also a new feature. The government has stated that it considers £5,000 to be a proportionate amount to ask individuals to pay, but this does not take into account any liability for their own lawyers’ fees, especially given the cross-cap of £35,000. The cross-cap will also affect the ability of lawyers to take cases on under a CFA because they run the risk of being unable to recover their full fees and uplift.

The consultation response does not include any proposals for environmental cases which are not brought by way of judicial review but the government does say that it is looking into this issue and may bring separate proposals in the future.

Potential claimants are still going to be deterred by the likelihood of liability for a significant proportion of their lawyers’ fees in complex cases. Arguably, in a case where the claimant wins, the proceedings will now be more expensive because the defendant’s contribution to costs is capped. Judicial Review is expensive and a claimant’s costs are likely to exceed £35,000 in a significant number of cases. There is also no proposed exception for cases where the defendant unreasonably defends a claim or behaves unreasonably during the course of proceedings causing the claimant to incur further costs than would otherwise be the case. Such protection is available in other fixed costs regimes.

The proposals are unlikely to be received with open arms from those practising in the field. Although the responses were generally in favour of placing PCOs on a statutory footing, the government has not re-visited the suggestion from a number of quarters, including Lord Justice Jackson, that qualified one-way costs shifting provides better protection for litigants. Not surprisingly, the government was warned in the consultation responses that the PCO system is not compliant with Aarhus and a challenge may well be on its way.