Out-Law News | 30 Sep 2015 | 5:49 pm | 4 min. read
Improvements to the regime are needed to address concerns raised by the European Commission over the UK’s approach to the rules, particularly the fact that they do not take into account challengers’ individual financial circumstances. The Court of Justice of the European Union (CJEU) upheld the Commission’s case in February 2014.
“The CJEU set out principles, which were subsequently reiterated by the [UK] Supreme Court, regarding the approach to determining what levels of costs in any particular case would be ‘prohibitively expensive’,” the Ministry of Justice (MoJ) said in a consultation paper setting out its proposals. “The judgment suggested that, in meeting the not ‘prohibitively expensive’ requirement, the rules could be significantly more flexible than the Environmental Costs Protection Regime currently provides.”
“Following these developments and in light of the fact that the current Environmental Costs Protection Regime was introduced prior to the judgments in these cases, the government considers there to be scope for making measured adjustments to the regime within the framework of the relevant directives. The proposals contained in this consultation are aimed at providing greater flexibility, clarity of scope and certainty within the regime,” it said.
Both the UK and the EU are signatories to the Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (Aarhus Convention), which is implemented within the EU through the Public Participation Directive. The Directive 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 which, amongst other things, should not be "prohibitively expensive."
In England and Wales, the requirements of the Directive are implemented through court rules, most notably section VII of part 45 of the Civil Procedure Rules (CPR) and associated practice directions. The current costs rules for these types of cases were introduced on 1 April 2013 and provide for a simple, fixed recoverable costs regime under which the amount recoverable from a losing challenger is capped at £5,000 for individuals and £10,000 in other cases. A 'cross-cap' operates, limiting the costs recoverable from a public body subject to a successful challenge to £35,000.
In February 2014, the CJEU held that the UK was within its rights to use court procedure or case law to give effect to the relevant parts of the Public Participation Directive. However, it was concerned that certain aspects of the regime in England and Wales did not "ensure the claimant reasonable predictability" about the ultimate cost of legal fees, including the ability of judges to impose a 'cross-cap' on the amount that a successful challenger could claim back from the public body and the fact that the rules did not take into account an individual challenger's financial position.
In order to address this, the MoJ has proposed the introduction of a 'hybrid' costs model. Under this approach, cost caps in every case within the scope of the Aarhus Convention would initially be set at a "default" level. However, any party to the case would be able to make an application to the court to vary the caps for any party, while the courts would also be able to increase, decrease or remove the caps altogether "of its own motion".
In any case where the court was considering whether to vary a costs cap, it would be required to "have regard to the principles set out [by the CJEU and Supreme Court] in ensuring any variation would not make costs 'prohibitively expensive' for the claimant," according to the consultation. This would include whether the costs of proceedings would "exceed the financial resources of the claimant, as this is the subject element set out in the Edwards cases," taking into account whether the claimant has or is likely to receive any financial support from third parties.
Requiring challengers to provide information about third party financial support would be consistent with new rules in relation to judicial reviews more broadly, the government said in its consultation. These changes, which are set out at sections 85 and 88 of the 2015 Criminal Justice and Courts Act, have not yet been brought into force. Once in force, these provisions will introduce a new form of cost capping order, although claims under the Aarhus Convention are excluded from the scope of the new regime.
The consultation also proposes widening the scope of claims to which the cost protection rules would apply from judicial reviews only to certain statutory claims which fall under the Aarhus Convention. These would, for example, include certain claims under the Town and Country Planning Act and the Planning (Listing Buildings Conservation) Areas Act, according to the consultation.
"The purpose of many reviews under statute is to perform the role that judicial review would otherwise perform, namely to enable persons aggrieved with an administrative decision to challenge the legality of that decision in court," the MoJ said in the consultation paper.
"It is with that in mind that the government considers it right to apply similar principles to reviews under statute that fall within the scope of the relevant directives as are applied to judicial reviews. This is not to say that all statutory review proceedings would be within the scope of the new regime; it simply means that the Costs Protection in Environmental Claims rules would extend [?] to the limited number of these cases in which the relevant directives are engaged," it said.
Depending on the outcome of the consultation, the government will ask the Civil Procedure Rule Committee (CPRC) to make any necessary amendments to the CPRs it considers necessary, the government said. The CPRC is the non-departmental public body responsible for making the CPRs.