CJEU: UK rules on environmental case costs are not "sufficiently precise" to meet EU requirements

Out-Law News | 17 Feb 2014 | 2:12 pm | 4 min. read

UK rules governing the way in which costs are awarded in environmental cases brought against public bodies are not "sufficiently precise and clear" enough to ensure that proceedings are not "prohibitively expensive", an  EUcourt has ruled.

The Court of Justice of the European Union (CJEU) ruled that aspects of the Public Participation Directive, which deals with access to justice in environmental matters, need not necessarily be set out in legislation and may be governed by court procedure or case law. However, it found that certain aspects of the UK regime, including the ability of judges to impose reciprocal cost caps preventing challengers from claiming back all of their costs from a public body, "[do] not ensure the claimant reasonable predictability" about the ultimate cost of legal fees.

"It should be stated first of all that the discretion available to the court when applying the national costs regime in a specific case cannot in itself be considered incompatible with the requirement that proceedings not be prohibitively expensive," said the CJEU in its ruling. "Furthermore, the possibility for the court hearing a case of granting a protective costs order ensures greater predictability as to the cost of the proceedings and contributes to compliance with that requirement."

The CJEU was concerned that there was in the UK no specific rule of law to ensure that proceedings are not prohibitively expensive for the claimant but instead, the position was set out in rules of court and the jurisprudence of different courts.

"Tthe mere fact that, in order to determine whether national law meets the objectives of [the Public Participation Directive], the Court is obliged to analyse and assess the effect – which is moreover subject to debate – of various decisions of the national courts, and therefore of a body of case-law, whereas European Union law confers on individuals specific rights which would need unequivocal rules in order to be effective, leads to the view that the transposition relied upon by the United Kingdom is in any event not sufficiently clear and precise " it said.

The Public Participation Directive implements the Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (Aarhus Convention) within the EU. It requires public bodies to ensure that members of the public have access to a procedure to challenge decisions relating to the environment to the extent permitted by national law. Amongst other things, it specifies that this procedure should not be "prohibitively expensive".

The UK argued that although this protection was not enshrined in the law, the Civil Procedure Rules that govern court procedure in England and Wales require the court to deal with cases "justly". It argued that, in practice, the rule that requires the unsuccessful party to pay the other side's costs is "applied less than in the past, in particular in cases falling within environmental law". Costs matters in these cases are decided "by the court in the light of all the factors of the case", it said. 

Referring to a recent referral to the CJEU from the UK Supreme Court, the CJEU said that national courts were not prevented by the Directive from making a costs order "provided that [the costs] are reasonable in amount and that the costs borne by the party concerned taken as a whole are not prohibitive". However, when making an order for costs the national court "must ... satisfy itself that the requirement that proceedings not be prohibitively expensive has been complied with, taking into account both the interest of the person wishing to defend his rights and the public interest in the protection of the environment". The amount of discretion given to judges in England and Wales meant that it was not clear that they were doing so, the CJEU said.

The CJEU did, however, dismiss part of the Commission's challenge dealing with the protective costs regime as "insufficiently supported to be capable of examination". In England and Wales, courts have the discretion to grant a protective cost order (PCO) before deciding whether to proceed with a challenge from the public to a Government project on environmental grounds, providing that claim falls clearly within the scope of the Aarhus Convention. A similar regime for protective expenses orders applies in Scotland.

However, both of these mechanisms involve a reciprocal element, where the public body's liability for the applicant's costs is also capped. The Commission stated as part of its challenge that in certain cases, "the claimant may be obliged to pay part of his lawyer's fees".

"To a certain extent the UK Government has already moved to deal with the criticism levied by the CJEU by making specific provision in the Civil Procedure Rules in relation to claims under the Aarhus Convention which provides for a cap on third party costs that a party to such a claim would have to pay," said Francis Tyrrell, an expert in environmental and public law at Pinsent Masons, the law firm behind Out-Law.com. "However, on the other hand, in the Criminal Justice and Courts Bill, the UK Government is currently pushing for a limit on the use of PCOs for judicial review to those cases deemed "exceptional" and "with a clear public interest".

"Third parties that join a judicial review case as 'interveners', such as campaigning groups that become involved in a case already taking place between an individual and a public body, would be made responsible for paying their own way," Tyrrell said.. "Those initiatives are set to put the UK on a head-on collision with the access to justice requirements of the Directive and Convention unless we start to see even more special treatment afforded to Aarhus Convention claims in comparison with other planning challenges, effectively creating a two-tier system."