Scottish courts to "formalise" protective expenses awards in environmental cases

Under the new law, individuals or environmental pressure groups bringing an environmental case against a public body will be able to apply for a protective expenses order, limiting their liability for the other side's costs to £5,000. The order will also cap the public body's liability for the applicant's expenses to £30,000. The changes take effect from 25 March.

According to the document, the court "must" grant the order if it is satisfied that it would be "prohibitively expensive" for the applicant to bring the case without one. It will only be able to refuse to grant the order if the applicant does not have "sufficient interest" in the case, or there is "no real prospect of success".

The Ministry of Justice announced the introduction of similar cost caps in environmental cases in England and Wales last year. Costs are capped at £5,000 for individuals and £10,000 for organisations, with the public body's liability for the applicant's costs is capped at £35,000. Unlike in Scotland, where courts will be able to alter the caps if the applicant can show "cause" why it should do so, in England and Wales the caps are fixed.

Litigation expert Heidi Archibald of Pinsent Masons, the law firm behind Out-Law.com, said that the change would "formalise" the existing system, under which courts had some discretion over whether to grant a protective expenses order.

"Previous case law had set out the criteria which required to be satisfied before a court would make an order protecting litigants against cost orders in the event that they were unsuccessful," she said.

"The new legislation extends the protection to both individuals and non-governmental organisations 'promoting environmental protection' wishing to raise judicial review challenges and environmental appeals, and probably extends the opportunity for judicial review in Scotland. It is also relevant to public authorities and other organisations that may, in appropriate cases, be denied the chance to recover legal expenses even if they successfully defend a challenge to their decision-making, or that are affected by such a challenge to the grant of a license or other authorisation."

Protective expenses orders can currently be granted where a court is of the view that the issues being raised in a case are of wider public interest. They are intended to ensure that judicial reviews against public bodies are not prevented from going ahead because an applicant might not be able to pay that body's costs in the event that the application is dismissed. They are frequently issued in environmental law cases, where there can often be an overlap between local interests and the principles of EU law.

The new law makes reference to the Public Participation Directive, which implements the Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (Aarhus Convention) in the EU. Under the Aarhus Convention, 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 this procedure should not be "prohibitively expensive".