In January 2010, following the publication of an interim report in May 2009 and an extensive consultation, Lord Justice Jackson published a report setting out his final recommendations following his review of civil litigation costs. In this e-bulletin we consider the recommendations relating to costs in judicial review proceedings.
- The report recommends that there should be qualified one-way costs shifting in judicial review cases. This would mean that in many cases claimants would be able to bring judicial review proceedings without the risk of an adverse costs order being made against them if the claim is successfully defended.
- The recommendations apply to all judicial review cases – there will be no distinct costs regime for environmental claims.
- If a defendant settles a claim after issue and the claimant has complied with the pre-action protocol, the normal order should be that the defendant pays the claimant's costs (modifying the rule in Boxall).
The current position – why is change needed?
The current position in judicial review is that costs generally follow the event, just as they do in other forms of civil litigation. However, many consider that because of the particular nature of judicial review claims, where individuals of limited means are challenging the exercise of powers by the Government or other public bodies, different rules should apply. Otherwise, there may be a risk that claimants will be deterred from bringing proper challenges by the fear of an adverse costs order. It has been argued that a public law costs regime should promote access to justice by facilitating the operation of public law scrutiny on the executive, in the public interest.
Concerns have also been raised that the current costs regime for judicial review cases does not satisfy the requirements of the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (the Aarhus Convention).
Although there have been efforts to address these concerns, principally through the use of Protective Costs Orders, many still consider that these are not an adequate solution. Whilst there appears to have been some increase in the courts' willingness to consider granting PCOs, the fact remains that the criteria are not easy to fulfil and claimants can have no certainty that they will obtain a PCO to enable them to bring proceedings without the fear of adverse costs.
Another significant factor in relation to costs in judicial review is the permission stage, the aim of which is to ensure that unmeritorious claims do not proceed. The existence of the permission stage means that there is already some degree of protection for defendants, so that two-way costs shifting is arguably less necessary as a deterrent.
(i) Qualified one-way costs shifting
Jackson LJ has concluded that qualified one-way costs shifting should be introduced for all judicial review cases, including environmental claims. In practice, the effect of this will be to mirror the costs position as it currently is for legally-aided claimants. If the recommendations are implemented, all claimants in judicial review who are of modest means will benefit from a costs "shield", whether they are legally aided or not. Wealthy or commercial claimants will continue to be subject to two-way costs shifting.
It is proposed that this will be achieved by the introduction of a new procedural rule, as follows:
"Costs ordered against the claimant in any claim for…judicial review shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including: (a) the financial resources of all the parties to the proceedings, and (b) their conduct in connection with the dispute to which the proceedings relate."
It can be seen from this wording that the court will retain a wide discretion. Although Jackson LJ considered the option of adopting a default position whereby the claimant's liability would be capped at a certain level (£3000 up to the grant of permission and £5000 up to the end of the case) he ultimately decided that this would not be appropriate, given the wide range of circumstances of different cases and different claimants. His concern was to ensure that for persons of modest means, the position will be the same whether they are legally aided or not.
(ii) Modification of the rule in Boxall
In R (Boxall) v Waltham Forest LBC (2001) 4 CCLR 258 Scott Baker J gave guidance on the costs position where judicial review proceedings are resolved before a full hearing but the parties have not reached any agreement as to costs. The general rule is that in this situation, in the absence of a good reason to make any other order, each party should bear its own costs. The rule pre-dates the introduction of the pre-action protocol for judicial review cases, which requires the parties to engage in pre-action correspondence with the aim of encouraging early settlement. Some respondents to the consultation expressed the view that the rule in Boxall is no longer appropriate in the light of the pre-action protocol. This concern arises principally from the fact that a significant number of cases are settled by defendants only after proceedings are issued and permission has been granted. This is despite the fact that if the claimant has complied with the protocol, the defendant will have been aware of the case against it and in a position to consider settlement much sooner and crucially before the claimant has incurred significant costs in issuing proceedings. In those circumstances it was considered unfair that a claimant should generally be unable to recover its costs.
To reflect these concerns, Jackson LJ has recommended that the rule in Boxall should be modified. If the recommendation is accepted, then in any judicial review case where the claimant has complied with the protocol, if the defendant settles after proceedings have been issued by conceding any material part of the relief sought, then there will be a presumption that the defendant shall pay the claimant's costs. The court will retain a discretion to make another order where the circumstances warrant it.
Jackson LJ's recommendations will now be considered by the Ministry of Justice which will take the final decision on whether they should be pursued. If implemented in their current form, the proposals will certainly improve the accessibility of claimants with limited means to the possibility of challenging public bodies in the courts. Importantly, the permission stage should protect defendant public bodies against a possible flood of unmeritorious cases being brought by claimants who may previously have been deterred by their potential costs liability. However, it will be essential for the Administrative Court judges to be rigorous at the permission stage in weeding out such cases if the new costs regime is to be effective.