Court provides welcome clarity on cost rules for environmental challenges

In the recent case of RSPB, Friends of the Earth & Client Earth v. Secretary of State for Justice [2017] EWHC 2309 (Admin), the claimants were partially successful in their application for judicial review, which sought to challenge amendments to the Civil Procedure Rules (‘CPR’) governing costs in environmental legal challenges. This decision will be of particular interest to charities and other organisations who may seek to challenge the decisions of public bodies that have a connection to the environment, as well as public bodies defending any such challenges. 

The Aarhus Convention

The United Nations Economic Commission for Europe (‘UNECE’) Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (‘the Aarhus Convention’) is founded on the premise that citizen involvement can strengthen democracy and environmental protection, and concerns rights of access to environmental information, participation in environmental decision-making processes and access to justice in respect of environmental matters. The Aarhus Convention has legal effect in the UK as a result of EU law.

The Aarhus Costs Rules (‘ACR’)

Following questions regarding the UK’s compliance with the Aarhus Convention, a bespoke regime of costs protection was introduced in 2013 for certain cases within the ambit of the Aarhus Convention (‘the ACR’). It provided for a fixed costs cap limiting the liability of an unsuccessful claimant to £5,000 (individual) or £10,000 (organisation) and that of an unsuccessful defendant to £35,000. In 2015, the government consulted on proposals to revise this cost capping scheme. Subsequently, changes to the rules came into force in February 2017.

Issues

The amendments made a number of changes to ACR, in relation to which the claimants raised three concerns:

• the provision allowing for the variation of cost limits at any stage in the litigation offended the requirement that costs be reasonably predictable, as required by EU law;

• the rules should provide for private hearings when the financial details of a claimant or a third party supporter are to be discussed or examined. The claimants were concerned that discussion of information of this kind in a public forum would deter claimants and third party supporters from bringing public interest environmental challenges;

• the claimant’s own costs of bringing litigation should be included in an assessment of costs protection, together with consideration of whether or not the proceedings are “prohibitively expensive”.

Judgment

The Court considered the variation of costs limits was consistent with EU law if read in conjunction with other procedural rules. The court noted that an application (including any application to vary a costs cap) should be made “as soon as it becomes apparent that it is necessary and desirable to make it”. As such, the court concluded that while it would have been beneficial for the ACR to have specified that any application to vary cost caps should be included within the acknowledgment of service (and therefore at the outset of formal proceedings), the CPR will generally require this anyway (except in certain circumstances, for example where the claimant unexpectedly acquires a significant amount of money).  

The court found that the CPR should provide for a hearing of a cap variation application to be in private in the first instance to preserve confidentiality where confidential financial information is being considered. Further, the court noted the importance of avoiding the chilling effect on meritorious claims where people refrain from taking action by reason of their finances being discussed publicly.  The court also recommended that the CPR should provide more specific information about the financial information required, which is currently unclear. 

The defendants accepted that the claimant’s costs may be material for determining any application for a variation of the costs caps. 

Comment

Reliance on the Aarhus costs caps is significantly less attractive under the amended ACR (now the cap can be varied and claimants must provide detailed financial information).  The RSPB judgment provides a degree of comfort that applications to vary should generally be made at the earliest stage. The court was sympathetic to charities’ concerns regarding the chilling effect that an open hearing on finances could have on donations, and recognised that in some cases parties may be relying on crowd-funding or large donations.  Private hearings on finances will be welcomed by claimants and third party supporters.  A final judgment on how the Court will give effect to its findings in this case will be determined following the submission of arguments.

To find out more challenges to the decisions of public bodies, join our half day Public Law Toolkit training on Thursday 12 October.

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This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of September 22, 2017.