In R (on the application of Garner) v Elmbridge Borough Council  EWCA Civ 1006 the Court of Appeal held that the usual principles on the granting of Protective Costs Orders ("PCO"s) set out in R (Corner House Research) v Secretary of State for Trade and Industry  EWCA Civ 192 need to be modified in environmental cases to ensure compliance with the access to justice provisions of the Aarhus Convention, as implemented by the Environmental Impact Assessment ("EIA") directive and the Integrated Pollution Prevention and Control ("IPPC") directive. These modifications are likely to make it easier to obtain PCOs in environmental cases than in other judicial review applications.
- In environmental cases, the "general public importance" and "public interest requiring resolution of those issues" conditions in Corner House effectively do not apply.
- In such cases, a purely subjective test based on a particular claimant's means is not appropriate in determining whether proceedings would be "prohibitively expensive" without a PCO, in breach of the directives, and a PCO may be granted where most "ordinary" members of the public would be deterred from proceeding by the potential cost liability.
- The imposition of a reciprocal limit upon a respondent's liability for costs may be fair, proportionate, and not prohibitively expensive and therefore compliant with the directives.
In Garner, the appellant sought permission to apply for judicial review of the respondent's decision to grant planning permission for a comprehensive redevelopment of a site opposite Hampton Court Palace. The appellant's application for a PCO was denied at first instance by Nichol J, who held that it failed to satisfy the Corner House conditions as the challenge was not one where the issues were of general public importance and which the general public interest required to be resolved. Nichol J also held that there was insufficient evidence of the claimant's financial resources to determine whether it would be fair and just to make the PCO under the Corner House conditions and whether the proceedings would be "prohibitively expensive," in breach of the EIA directive, if a PCO was not made.
In Corner House, the Court of Appeal set out the following principles to be followed when considering an application for a PCO:
"1. A protective costs order may be made at any stage of the proceedings, on such conditions as the court thinks fit, provided that the court is satisfied that:
(i) The issues raised are of general public importance;
(ii) The public interest requires that those issues should be resolved;
(iii) The applicant has no private interest in the outcome of the case;
(iv) Having regard to the financial resources of the applicant and the respondent(s) and to the amount of costs that are likely to be involved it is fair and just to make the order;
(v) If the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in so doing."
The Access to Justice provisions in the EIA and IPPC directives
Article 10a of the EIA directive provides that:
"Member States shall ensure that, in accordance with the relevant national legal system, members of the public concerned … having a sufficient interest … have access to a review procedure before a court of law … to challenge [decisions governed by the Directive which is] fair, equitable, timely and not prohibitively expensive."
Article 16 of the IPPC directive is in similar terms.
Public interest tests do not apply
The Court of Appeal (Sullivan LJ; Lloyd and Richards LJJ agreeing) allowed the appeal and held that in cases where the EIA or IPPC directives apply, the Corner House conditions must be modified so as to ensure compliance with the directives. As such, the "general public importance" and "public interest requiring resolution of those issues" conditions in Corner House do not arise to be considered since the directives are based on the premise that it is in the public interest that there should be effective public participation in the decision-making process in significant environmental cases. The High Court was therefore not entitled to deny the appellant's application on the basis that the matter did not satisfy the public interest tests in Corner House.
Prohibitively expensive test not "purely subjective"
The Court then considered the requirement under the directives that review procedures are "not prohibitively expensive." The appellant in Garner was unwilling to undergo a means test in a public forum and there were only vague references to his means in evidence. The Court expressed its reluctance to decide whether an objective or subjective test, or some combination of the two, ought to be applied in determining "prohibitive expense" as the issue was under consideration by the Aarhus Convention Compliance Committee, the European Commission, and was also likely to arise in a pending Supreme Court appeal.
Nevertheless, the Court held that a purely subjective approach based on the means of a particular claimant, as taken by Nichol J in the High Court, was not consistent with the directives. The Court stated that as a matter of common sense most "ordinary" members of the public would be deterred from proceeding with the case by the potential cost liability (estimated to be at least £60,000 plus VAT). The Court noted the reluctance of the appellant to undergo a public means test, stating that investigations into the means of individual claimants may also have a chilling effect on the willingness of ordinary members of the public to bring environmental challenges, contrary to the underlying purposes of the directives. The Court therefore held that Nichol J's approach to the "prohibitively expensive" issue was not consistent with the directive, and a PCO was necessary in this case if the proceedings were not to be prohibitively expensive.
Reciprocal limits are not necessarily incompatible
The respondent in Garner had made an offer in open correspondence to agree to a PCO on the basis that it would limit its costs claim to £5,500 in exchange for a reciprocal cap on its liability of £35,000. The appellant rejected this and argued that there was no reason to impose additional limitations on the remuneration of claimants' lawyers, which would have the effect of penalising a successful claimant in costs or requiring his legal advisers to subsidise the litigation. While accepting that there may be potential long term difficulties if modest reciprocal caps were consistently imposed, the Court stated that these were systemic issues which could not be resolved within the immediate appeal. It held that, on the facts available to it, the imposition of a reciprocal cap of £35,000 as proposed by the respondent was fair and proportionate, and not prohibitively expensive. It granted a PCO of £5,000 with a reciprocal cap of £35,000.
This is the first time that the Court of Appeal has had to consider the application of the Corner House principles in a case where the access to justice provisions of the EIA or IPPC directives apply. In modifying the normally applicable principles, their judgment makes it more likely that PCOs will be granted in environmental cases. The public interest tests in Corner House are effectively disapplied, and although the Court does not expressly hold that an objective test applies in considering whether proceedings will be prohibitively expensive, given the scant evidence of the appellant's means, his unwillingness to undergo a means test and its comments regarding the chilling effect of investigations into claimants' means, the Court does appear to have adopted something approaching a purely objective test. The imposition of reciprocal limits on respondents' costs reflect an attempt by the Court to 'level the playing field,' however as these matters are currently being considered by the Aarhus Convention Compliance Committee, the European Commission and may arise before the Supreme Court, this is unlikely to be the last word on this issue.