Out-Law News 2 min. read

Government to introduce fixed caps on parties' costs in environmental judicial review proceedings from December

The Government plans to introduce a cap on the extent to which the losing party to an environmental challenge will be expected to cover the winning party's legal costs.

It plans to introduce Protective Costs Orders (PCOs) for environmental judicial review claims from December 2012, according to the Ministry of Justice's response (32-page / 130KB PDF) to last year's consultation on cost protection for litigants. Courts will be able to grant a PCO before deciding whether to proceed with a challenge from the public to a Government project on environmental grounds, providing that the claim falls clearly within the scope of the Aarhus Convention.

The proposal differs from that set out in the consultation document, which suggested that grant of a PCO would depend on permission to proceed with the challenge being granted. A similar Scottish consultation closed in April but the Scottish Government is yet to publish its response.

Under the Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (Aarhus Convention), implemented in the EU by the Public Participation Directive, public bodies must ensure that the public have access to a procedure to challenge decisions relating to the environment to the extent permitted by national law. Amongst other things, the Convention specifies that these court procedures should not be "prohibitively expensive".

Courts in England and Wales have been developing PCOs as a mechanism designed to limit parties' exposure to costs, according to the consultation, and there is now a "strong presumption" that one will be granted where an environmental challenge is brought for public interest reasons. However, the courts still retain a large amount of discretion about whether a PCO should be granted in a particular case.

In its response the Government said that if permission is refused the claimant’s liability costs will be capped at £5,000 if it is an individual and £10,000 if it is an organisation. The liability of the defendant to pay the costs of the claimant will be capped at £35,000. These caps will be fixed, differing from the position in the consultation which proposed that parties could apply to have them altered in exceptional circumstances.

However Craig Connal QC, a litigation expert at Pinsent Masons, the law firm behind Out-Law.com, wondered whether limiting the costs that could be awarded against an unsuccessful party would increase the risk of "ill-founded" claims.

"The success rate of these challenges is so low," he said. "The whole exercise seems to overlook the interests of the private sector who will often be holding the consent or whatever is being challenged; increasing their risks and costs even if the project is overall in the public interest."

Environmental law expert Simon Colvin of Pinsent Masons agreed. The existing regime presented a "significant deterrent to those that would otherwise become serial litigants", he said, including some NGOs.

"There is a very real risk that this could create a 'have a go' culture in the name of access to environmental justice, unless the courts keep very tight control over such proceedings," he added.

Nine of the 11 responses that the Government received to its consultation question on whether the current regime deterred potential claimants from bringing a judicial review within the scope of the Aarhus Convention due to prohibitive costs said that they would either be deterred themselves, or knew of particular litigants who had been deterred from bringing applications. 76% of the respondents to a survey conducted by the World Wildlife Fund, referred to by one consultation respondent, were aware of "good arguable cases that did not proceed" because of concerns about costs.

The Government said that it would conduct further work to establish whether caps should be extended to other types of procedure, including statutory appeal and statutory review procedures. It was not clear whether, and if so, to what extent, these procedures fell within the scope of the Aarhus Convention at this stage, it said.

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