21 September 2015Print This Post

MoJ consults on costs protection in environmental litigation

ECJ: costs protections must take account of claimants' circumstances

ECJ: costs rules must take account of claimants’ circumstances

The government has launched a consultation on steps to bring the UK into line with recent judgments of the European Court of Justice on costs protection for certain environmental challenges.

It has been prompted to revise the current regime by judicial clarification of obligations under the Public Participation Directive, which wrote into EU law the requirements from article 9(2) of the Aarhus Convention, obliging member states and contracting parties respectively to ensure that environmental legal proceedings are “not prohibitively expensive”.

European Court of Justice rulings in 2013 and 2014 had the effect that “prohibitively expensive” meant that account must be taken of a particular claimant’s financial position.

In light of the judgments, the present Environmental Costs Protection Regime (ECPR), governed by section VII of Part 45 of the Civil Procedure Rules in relevant environmental judicial review cases, is insufficiently flexible.

Currently the costs rules, introduced on 1 April 2013, provide for a simple fixed recoverable costs regime that caps the amount recoverable from the claimant at £5,000 where the claimant is an individual (£10,000 in other cases), and from the defendant at £35,000.

Describing the weakness of the current position in light of the rulings, the Ministry of Justice observed: “Other than the distinction drawn between claimants who claim as individuals and all other claimants, the rules do not take into account the nature of the claimant…

“The court does not take into consideration an individual claimant’s financial resources or whether the costs of the proceedings might appear to be objectively unreasonable.”

In the consultation, the government proposed widening the scope of claims under the ECPR beyond judicial reviews to statutory reviews which fall under the convention, such as applications under the Town and Country Planning Act 1990 – appeals against enforcement decisions relating to unauthorised development.

It also questioned whether costs protection should be restricted to claimants only when they had received permission to apply for judicial or statutory review to “minimise the grant of costs protection in unmeritorious cases and act as a disincentive against bringing umeritorious challenges to cause delay”. A similar provision relating to new cost-capping orders in judicial reviews is contained within the Criminal Justice and Courts Act 2015, but has not yet been commenced.

To address the inflexibility identified in the current rules in relation to the “not prohibitively expensive” requirement, the government proposed what it described as a “hybrid” model because, in every case where the regime applied, “the costs caps would – at least initially – be set at a default level, but any party could make an application for the court to vary their own – or another party’s – costs cap…

“The court would also be able to vary the caps of its own motion. In varying the caps, the court would be able to increase or decrease them and, in appropriate cases, remove a cap altogether.”

Also in line with the judicial review reforms, it proposed that defendants should be able to discover how claimants were financing challenges: “The government considers that information about how claimants are financing environmental challenges should be provided to the court, including information about financial support which third parties are providing or are likely to provide…

“A claimant who indicates on the claim form that they consider the proceedings to be an Aarhus Convention claim would be required to file at court and serve on the defendant a schedule of their financial resources, verified by a statement of truth. This would be done at the same time as issuing and serving the claim form and would ensure that, in all cases, defendants had access to the relevant information.”

By Dan Bindman

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