Limiting costs risk in crowdfunded judicial reviews

Judicial review is, in the absence of a specific statutory appeal process, the way in which we are able to hold public bodies to account for their decisions. The costs of bringing a judicial review can be substantial, and some claimants have been turning to crowdfunding as a solution to this problem.  However, claimants must also consider the risk that they will be ordered to pay the defendant’s legal costs if their claim is unsuccessful.  In a recent decision, Cheema-Grubb J granted an order limiting the liability of the claimants for the defendants’ costs in a crowdfunded judicial review (R (on the application of Hawking & Others) v (1) Secretary Of State for Health & Social Care (2) National Health Service Commissioning Board 22 February 2018).

Charities, Public

Professor Stephen Hawking and a group of medics are challenging the lawfulness of a policy regarding health commissioning in the NHS (“the Policy”).  The claimants argue that the Policy would lead to privatisation.  They are funding the challenge through crowdfunding, but made an application for an order limiting their liability for the defendants’ costs.  This was initially refused on the grounds that there was good reason to think these costs could be met through more crowdfunding.

Cheema-Grubb J overturned that decision and granted the costs capping order (“CCO”).  The circumstances when a court may grant a CCO are set out in sections 88-89 of the Criminal Justice and Courts Act 2015 (“CJCA”).  In this case it was held to be highly likely that issues raised by the claimants would be of high public interest (although it was noted that the Secretary of State’s decision – after proceedings were issued – to consult on the Policy did diminish the public interest; equally, the grant of permission for judicial review did not necessarily mean the public interest test was satisfied).  The judge accepted that the claimants would not continue with the claim without a CCO, and found that this would not be unreasonable: giving the uncertain nature of crowdfunding, it was uncertain whether the defendants’ costs could be met in this way. The claimants did not have any personal interest in the outcome and it was unreasonable to expect them to bear the burden of the high degree of financial risk – this was exactly the sort of case, the Court found, where a CCO should be made.  Cheema-Grubb J also noted that in this case both sides were publicly funded.  In granting the CCO, she made a reciprocal cap (ie the costs that the claimants can recover from the defendants if successful to be limited too).    

The threshold for obtaining a CCO under the CJCA is a high one, and the courts will not grant them lightly.  This case demonstrates, however, that courts are willing to engage with the realities of funding campaigning litigation, and indicates that CCOs may well be available in crowdfunded cases.  CCOs in such cases can provide some certainty for claimants as to the crowdfunding target which they are required to reach to fund the litigation and mitigate risk exposure in the event that they are unsuccessful.                   

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 February 28, 2018.