The tests and procedures in relation to Protective Expenses Orders - the mechanism by which petitioners seek to limit their liability for legal costs in environmental appeals and judicial reviews - have been the subject of a number of recent decisions from the Scottish courts. 

Assessments of the underlying relevant European convention and directives have been a specific feature of all of these cases. 

Gibson, Petitioner set out the subjective and objective tests to be applied by the court in determining an application to cap the expenses of an applicant in judicial review proceedings (read our Law-Now on the case here). If either test is satisfied, the rules provide that the court must grant a Protective Expenses Orders (“PEO”) whereby the liability of the applicant to the opposing party is capped at £5,000 and the liability of the opposing party to the applicant is capped at £30,000. 

We now have another important decision in John Muir Trust for judicial review of a decision of the Scottish Ministers which gives further guidance on this issue.


John Muir Trust, a non-governmental organisation (“NGO”) applied for and was refused a PEO (known as a Protective Costs Order in England) in October 2014. The court was not satisfied that, but for the PEO, the case would be “prohibitively expensive” for the Trust – that being the test under the Scottish rules of court.

Although the PEO was refused, the Trust continued with the court action. The judicial review hearing took place in February 2015 and the decision to grant the judicial review and quash the decision of the Scottish Ministers was issued in December 2015. That decision was appealed by the Scottish Ministers and SSE. 

As part of the appeal process, the Trust made a further application for a PEO, which was opposed by the Scottish Ministers and SSE. Following a hearing before three judges in the Inner House, the application has been refused in a majority decision.

Arguments for John Muir Trust

The Trust argued that:

  • as an NGO, the Trust had been given a “special supervisory role of defending the environment” under European law;
  • it had a “reasonable prospect of success” having been successful in the Outer House judicial review proceedings;
  • if not granted a PEO, the Trust was likely to be deterred from raising similar proceedings in future; and 
  • other activities in which the Trust was involved ought to be taken into consideration. 

The Trust also sought an increase in the reciprocal cap to £50,000, beyond the level of £30,000 referred to above.


The Scottish Ministers and SSE argued that the Trust had failed on both the subjective and objective tests:

  • it had not shown that the proceedings were prohibitively expensive;
  • it had adequate resources including funds raised specifically to fund the judicial review (the “Stronelairg appeal”) and had received substantial donations and bequests which had enabled it to pursue the case without a PEO. Accordingly, the Trust would not be pushed to the limits of its resources; and
  • there were important matters at stake for the environment, including reduction of carbon emissions and meeting renewable energy targets; and
  • member states retained a power to award reasonable costs in any litigation. 

The court’s decision

The majority’s decision noted:

  • The onus is on the applicant to satisfy the court that, but for an order capping its potential liability, it could not reasonably continue with the proceedings - the Trust had failed to do this.
  • The fact that an NGO performs an environmental role does not, of itself, justify the grant of a PEO or mean that the threshold is lower.
  • Only the costs of the appeal proceedings and not those in the Outer House were relevant.
  • The court retained the power to deal with reasonable costs awards on the completion of the proceedings and account would be taken of the principles set out in the European Directive.
  • The Trust’s potential liability in the Inner House was less than the funds raised by the Stronelairg appeal. In addition, fund-raising was continuing and further funds might become available.
  • Considering the objective test, the proceedings were complex and the estimated fees were not disproportionate in the circumstances.
  • The lodging of a financial review of the Trust’s resources based on publicly available financial information did not amount to an overly forensic exercise (as had been discouraged in Gibson).
  • Prospects were considered to be neutral given the substantial arguments submitted by the Scottish Ministers and the Interested Parties. What was at stake was also to be viewed as neutral given the environmental issues referred to by the Scottish Ministers.
  • The proposed increase in the cap was not justified. 

The dissenting judgement (Lord Drummond-Young) relied heavily on the objective and intent of the European convention to encourage public participation in decisions on environmental matters and to provide certainty in advance of proceedings. Where the public is not in a position to take a challenge he expressed the view that challenges by NGOs “assume particular importance”.

He commented on the costs associated with an adversarial as opposed to an inquisitorial system which he felt made litigation in the UK relatively costly by comparison with other European states. 

He considered “prohibitively expensive” had to be viewed against that background and having regard to the “overall financial requirements of an environmental charity”.

Reviewing the Trust’s accounts against these factors he concluded that in his view the proceedings would be prohibitively expensive for the Trust. 

This is unlikely to be the last we have heard of PEOs in Scotland as there are divergences in approach, as demonstrated by a majority decision in this case.