Masthead Local Govt - Litigation

Aarhus costs rule challenge

Environment 146x219Three charities recently took the Ministry of Justice to the High Court over new costs rules for environmental cases. Andrew Parkinson explains the outcome.

Mr Justice Dove has handed down judgment in RSPB and others v Secretary of State for Justice [2017] EWHC 2309 (Admin), a challenge by a number of NGOs to the amendments made to Part 45 of the Civil Procedure Rules which brought about changes to the costs arrangements in legal disputes in relation to environmental law.

The previous regime provided for fixed costs caps (limiting the liability of an unsuccessful claimant to £5,000 or £10,000 and that of the unsuccessful defendant to £35,000).

So far as is relevant to the challenge, the main changes brought about by the new rules are as follows:

(1) To apply for these default costs caps, a claimant must have “filed and served with the claim form a schedule of the claimant’s financial resources which takes into account any financial support which any person has provided or is likely to provide to the claimant and which is verified by a statement of truth”: CPR 45.42(1)(b).

(2) The court can vary or remove the costs limit if satisfied that—(a) to do so would not make the costs of the proceedings prohibitively expensive for the claimant; and (b) in the case of a variation which would reduce a claimant’s maximum costs liability or increase that of a defendant, without the variation the costs of the proceedings would be prohibitively expensive for the claimant: CPR 45.44(1)-(2).

The claimants argued as follows:

(1) Ground One: the ability to vary the costs limits at any point in the litigation breached the EU principle that a claimant should be provided with “reasonable predictability” not only as to whether costs of proceedings may be payable but also as to their amount;

(2) Ground Two: it was unlawful for the new rules to fail to provide for private hearings when a claimant or a third party supporter’s financial details may be discussed and examined;

(3) Ground Three: the claimant’s own costs of bringing the litigation should necessarily be included within the assessment of the financial resources of the claimant for the purposes of deciding whether or not the proceedings are “prohibitively expensive”.

Dove J found as follows:

(1) Ground One: Read as a whole, in particular with reference to PD23A which provides general guidance on the timing of applications, the CPR required that any application to vary the cap based on the claimant’s schedule of financial resources should be made at the stage of filing the acknowledgement of service (J/37). As a general principle, failure to apply at this stage would be in breach of the EU principle of “reasonable predictability” (J/39). The exception to this is where it is demonstrated that the claimant has provided false or misleading information in the schedule of resources or there has been a material change in the claimant’s financial resources (J/40). Whilst, Dove J noted that it would have been beneficial for the rules to make this clear (J/38), he was satisfied that the new provisions were consistent with EU law when considered in the context of the surrounding procedural rules and practices.

(2) Ground Two: It was noted that the Secretary of State had indicated prior to the hearing that he may be prepared to include reference to applications to vary the costs cap in CPR PD39, paragraph 1.5 (which sets out hearings that should be listed for hearing in private in the first instance) (J/49). However, at the hearing the Secretary of State indicated that this was not required in order to secure compliance with EU law (J/51). Dove J disagreed stating that he was “satisfied that the chilling effect which the prospect of the public disclosure of the financial information of the claimant and/or his financial supporters would have on the propensity to bring meritorious claims would be in breach of the requirements to ensure wide access to justice set out in the CJEU jurisprudence” (J/57). He stated that PD39 para. 1.5 required amendment (J/57).

(3) Ground Three: By the time of the hearing it was common ground that in undertaking the assessment of whether or not proceedings are “prohibitively expensive” the court may take into account the claimant’s own costs in bringing the claim (J/58). Dove J agreed (J/58), but found it unnecessary to grant declaratory relief given that the correct position was set out in the judgment (J/59).

Dove J has asked the parties for submissions on the appropriate form of relief.

Andrew Parkinson is a barrister at Landmark Chambers. He appeared for the claimants led by David Wolfe QC.

James Maurici QC appeared for the Secretary of State (Charles Banner and Jacqueline Lean have previously acted for the Secretary of State in relation to these proceedings but were unavailable for the hearing). All three are barristers at Landmark.

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