[cleanairuk_news] UK Government proposes limits to liability for environmental legal challenges

[Network for Clean Air]

http://www.lexology.com/library/detail.aspx?g=39d77463-3e2c-4096-a0d0-14c8bb4af0a2

Changes to costs rules in environmental judicial review claims announced

Freshfields Bruckhaus Deringer LLP
Jonathan Isted
United Kingdom
December 4 2012

Summary

The Ministry of Justice (MOJ) is proposing that a claimant’s liability
for the defendant’s costs in judicial review cases that involve
environmental issues be capped at £5,000 (or £10,000 if the claimant
is an organisation). Similarly, a cap of £35,000 will apply with
regard to a defendant’s exposure to a claimant’s costs where the
claimant is successful.

The proposal is contained in the government’s response to its 2011
consultation: ‘Costs Protection for Litigants in Environmental
Judicial Review Claims’.

Recipients of planning permissions subject to environmental impact
assessment and other environmental regulatory consents should be aware
that the proposal may increase the risk of legal challenges to their
grant.

Background

In the UK, costs usually ‘follow the event’ so that the losing party
is usually required to pay some, if not, all of the successful party’s
legal costs. This can act as a brake on the bringing of litigation by
individual claimants.

In the environmental law context the EU and its member states have
signed up to an international treaty, the Aarhus Convention on Access
to Information, Public Participation in Decision-making and Access to
Justice in Environmental Matters (the Aarhus Convention), which seeks
to ensure all citizens are able to obtain access to justice through
the courts in relation to environmental matters. Further, this access
is required to be at a reasonable cost, and not prohibitively
expensive.

Both the Aarhus Convention Compliance Committee and the European
Commission have expressed their opinion that the current costs rules
in the UK do not comply with the requirements of the Aarhus
Convention, preventing UK citizens from enforcing their environmental
rights before the Courts. The consultation was therefore designed to
assess what further measures are required to be taken to bring the UK
into compliance.

The proposal

The MOJ is proposing to codify the existing Protective Costs Order
(PCO) regime, which is designed to limit the exposure of claimants to
defendant’s costs. The court will be able to grant a PCO to the
claimant before permission for judicial review is granted, provided
the claim is within the scope of the Aarhus Convention. They will not
therefore be dependent on permission for judicial review being
granted, as the MOJ had initially suggested. This stems from concern
among NGOs that, although rare, it is possible to incur significant
costs before permission is granted.

The MOJ had recommended a uniform cap on a claimant’s liability for
costs at £5,000. Following the consultation, it felt that the cap
should be higher where the claimant is an organisation; in this case
the cap will be £10,000. Many respondents to the consultation (mainly
NGOs or legal practitioners) suggested that the cap should be around
£2,000-3,000, arguing that a risk of paying £5,000 was still
prohibitively expensive for many potential litigants.

The recommended cap on the defendant’s liability has also been raised
from the original consultation proposal of £30,000, to bring it in
line with current case law.

The caps will be fixed; there will be no provision to alter or remove
either cap. Although the original consultation suggested that the cap
would be removable in exceptional circumstances, the MOJ takes the
view that there will not be sufficient circumstances for the cap’s
removal to justify the uncertainty and possible complications in the
majority of cases.

For cases that go to appeal, the MOJ proposes that the judge
considering permission to appeal should also determine the appropriate
costs limits having regard to the decisions in the lower court. This
follows the rule for fixed costs regimes proposed by Lord Justice
Jackson in his review of civil proceedings.

Way forward

The MOJ plans to implement the proposals through amendments to the
Civil Procedure Rules later this year. The proposals will be put to
the Civil Procedure Rule Committee for consideration as soon as
possible.

The consultation responses also expressed concern that the caps would
not apply to certain statutory procedures relating to environmental
matters. The MOJ plans to consider this issue further in the future.

Impact

There is understandable concern that decreasing the risk of incurring
a costs liability in the event that an unmeritorious claim is pursued
may lead to many more environmental judicial review claims. The
requirement to apply to the Court for leave to apply for judicial
review will however continue to act as a constraint to the bringing of
weak claims.

The cap on the ability to recover costs may also affect the way the
public bodies granting planning permissions with an environmental
dimension and other environmental regulatory consents manage the
defence of judicial review cases, particularly in the present
financial climate where the emphasis is on reducing public spending.
This is likely to put further pressure on the recipient/beneficiary of
the planning permission or consent to participate in such proceedings,
as a party directly affected, in order to ensure that both sides of
the argument are properly aired.

The new rules do not appear to affect the position of a third party
participant in a judicial review case. It will still be possible for a
third party to incur a liability for costs, and also to recover its
costs, although both of these occurrences are relatively rare; an
interested party will usually not be able to recover its costs, for
example, unless it can show that it has brought something to the
proceedings (eg, evidence on a specific technical point) that could
not have been covered by the principal parties. It is highly unlikely,
however, that the Court would be willing to make a costs order where
either the claimant or defendant has the benefit of a PCO.


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