A raft of changes to the costs regime for judicial review (JR) proceedings – including greater use of wasted costs orders and possibly scrapping protective costs orders (PCOs) – has been proposed today by the government.
The “rebalancing” of the financial incentives is part of a series of measures put forward by the Ministry of Justice (MoJ) which it said are “designed to speed up the judicial review process and drive out meritless cases which clog up courts and slow the progress of legitimate applications”.
The number of JRs has more than doubled over the past decade, to 12,400 in 2012, with immigration and asylum cases the driver. Around 40% of applications ended by being withdrawn before consideration of permission by the court while the majority of applications that do reach court are refused permission at the first consideration on the papers. Where an oral hearing was then requested, permission was granted in 12% of cases.
For cases lodged in 2011, around 4% of all applications reached a final hearing, when around 40% of decisions were in favour of the claimant.
In a consultation paper  published today, the MoJ has identified five areas of possible costs reform. First, following strong opposition, it has modified an earlier proposal that legally aided claimants should only be paid if permission is granted. It suggests giving the Legal Aid Agency discretion to make a payment in meritorious cases which conclude before a permission decision is made.
Second, at present a claimant who is refused permission to bring a JR is liable only for the defendant’s costs of completing the acknowledgement of service. The consultation asks whether in fact the claimant should usually be liable for the reasonable costs of defending the unsuccessful application.
Between March 2011 and June 2013, only around 50 wasted costs orders were made – at an average value of £400 – all of them in relation to immigration and asylum cases. So third, the MoJ is seeking views on “whether the current approach to wasted costs orders should be modified to enable the making of such an order to be considered in respect of a wider range of conduct”.
It explained: “The legal representative is in the best position to advise their client of the likelihood of success, first prior to the initial application on the papers for permission and then again at the oral renewal hearing. Many claimants will make decisions on the basis of that advice.
“The government considers that a greater incentive might be beneficial for legal representatives to consider the strength of a case prior to submitting and renewing applications for permission, and that legal representatives should have a greater focus on the appropriateness of putting forward points that have already been considered and dismissed by a judge, particularly when there is not a high likelihood of success.”
It has also suggested that legal representatives who contest a wasted costs order and request an oral hearing should be required to pay a fee for the cost of that hearing, and asked whether that fee should be contingent on the case being successful.
The fourth change concerns PCOs, with the MoJ suggesting that the courts have gone beyond the principles set out in the landmark Corner House case so that cases no longer need to be “exceptional” to merit an order, while PCOs have increasingly been granted where there is a private interest at stake. It said it was also concerned with the “inequality” in the current use of cross caps, to the detriment of defendants.
The consultation indicates a preference to remove the right to a PCO for claimants with a private interest in a JR claim. “Further, and if ‘political’ and ‘campaigning’ judicial review claims continue to be brought where there is no claimant with a private interest, the government seeks views as to whether these sorts of claims ought to be given cost protection and whether it is right to remove the use of PCOs in non-environmental claims.”
As an alternative to removing PCOs, the MoJ asks if the principles as set down in Corner House “strike the right balance” or whether they should be modified. It also suggests that when applying for a PCO, it should be mandatory for the claimant to provide details of who is funding the case and a statement of assets, including any third-party funding.
The government is also proposing that there should be a presumption when making a PCO that the court considers setting a cross-cap for a defendant’s liability for the claimant’s costs.
The final issue is costs arising from the involvement of third-party interveners and non-parties. The MoJ’s provisional view is that where a party seeks to intervene in a case, the rebuttable presumption should be that it should bear its own costs of doing so, whatever the result of the claim.
Further, where an intervening party has raised issues that have resulted in either party incurring legal costs to a significant degree over and above what would otherwise have been required, the intervening party ought to be liable for them.
The other non-costs proposals put forward by the MoJ today include that only those with a direct interest should be able to bring a JR – “so that the process cannot be exploited for campaigning or publicity purposes, at the expense of others” – and strengthening the court’s powers where a rectification of a claimed flaw would be likely to have made ‘no difference’ to the original outcome.
Justice Secretary Chris Grayling said: “We want to make sure judicial review continues its crucial role in holding authorities and others to account, but also that it is used for the right reasons and is not abused by people to cause vexatious delays or to generate publicity for themselves at the expense of ordinary tax-payers.”
The new proposals follow changes implemented in July, including stopping people from having a ‘second chance’ hearing if their initial written application is ruled totally without merit by a judge.