Prohibitive costs – further thoughts

25 October 2012 by David Hart KC

R (Edwards & another) v. Environment Agency, Opinion of A-G Kokott, CJEU, 18 October 2012, read opinion

In my post of yesterday, about this opinion of the Adocate-General, I set out the context in which the Supreme Court was asking for guidance from the CJEU on how to provide for costs in environmental cases, given that the UK is committed by Treaty obligations (the Aarhus Convention) and specific provisions of EU law to ensure that environmental cases are not “prohibitively expensive.”

As I put it, the first and obvious question is – prohibitive to whom? No litigation may be prohibitively expensive to Roman Abramovich. Any costs liability may deter someone on state benefits.

Towards the middle of my previous post, I described how A-G Kokott then faced the Abramovich v. person on benefits question. English lawyers are very fond of the “is it subjective or objective?” question. The Advocate-General’s answer to the Supreme Court’s question was – a bit of both. The European Commission was arguing that there was an objective standard – would an ordinary person be deterred by the costs in issue? The Advocate-General recognised that environmental cases fell into a specific category; in a sentence redolent of Lord Hope last week (see my post):

Recognition of the public interest in environmental protection is especially important since there may be many cases where the legally protected interests of particular individuals are not affected or are affected only peripherally. However, the environment cannot defend itself before a court, but needs to be represented, for example by active citizens or non-governmental organisations.

But then she made it a lot more complicated. And thinking about it quite a bit further, the answer is even less clear than my initial thoughts on her opinion. So those that remain interested might wish to read this revised chunk of text.

“A. A claimant may be being purely public-spirited. Equally, he or she may be defending their economic interests. The latter ought to bear higher risks than the former. But that does not mean that the presence of someone pursuing their own individual interests means that you disregard any public interests in the case; the A-G gives the example of an airport where there might be a very wide group only a few of whom may be suing. So a court has to titrate individual interests against wider public interests.

B. The prospects of success may be relevant.

In a perfect world, all of this may be fine. But how do you come up with a system which does not in practice deter people from even starting litigation. The UK has evolved its own mechanism in an attempt to address this – the Protective Costs Order. The idea is at the beginning of proceedings the courts set a figure which the claimant will have to pay if he or she loses. Current thinking from the Ministry of Justice is that this figure should be £5,000 in environmental cases. If the claimant gets such a PCO, he or she can then decide – yes I will sue, no, I won’t. The A-G thought that the PCO system was “in principle an appropriate element in the implementation of Article 9(4) of the Convention…” The obvious point for a claimant is that you know where you stand before you start.

But the problem with the A-G’s picture of a PCO is that getting her sort of PCO is about as complicated as winning the case at the end of the trial.

The Defendants may argue that a claimant’s means will be important in this equation;  [45] of the opinion contemplates taking into account the claimant’s economic interest in the proceedings; he may be seeking to protect the value of his house from pollution or the encroachment of development. But not every challenge involves those interests, and as the Opinion emphasises, it is extremely important not to stifle the pure environmental case in which there is no private interest in play.  

So in such a pure environmental case, without the confusing factor of a claimant’s direct economic interest, is the individual claimant’s means relevant, or not? Or should there be some benchmark sum above which no individual claimant should be expected to pay? 

In my view, there is no straight answer from the A-G to this question. She tells us that the individual claimant may rely on the fact that his or her means would deter him from proceeding. But that does not exclude the possibility that the general level of costs in such cases might deter people who theoretically could afford such costs, and hence the question of prohibitive costs should be regarded objectively – would it deter an ordinary person, in which the actual means of the claimant become irrelevant. There is a good deal of discussion of various pointers to and fro on this question, but her conclusion sits fairly firmly on the fence:

49.      The answer to the second question is therefore that in examining whether costs of proceedings are prohibitive, account must be taken of the objective and subjective circumstances of the case, with the aim of enabling wide access to justice. The insufficient financial capacity of the claimant may not constitute an obstacle to proceedings. It is necessary always, hence including when determining the costs which can be expected of claimants having capacity to pay, to take due account of the public interest in environmental protection in the case at issue.

– remembering that the second question was whether the prohibitive expense of the litigation should be decided on an objective or subjective basis or using a combination of both. 

The other way of reading the A-G is that nothing she says casts any doubt on the objective standard being the appropriate one, and some of her reasoning supports that position; indeed, in the Supreme Court’s original reference, that was their initial views on the merits.

The A-G also says that the public interest of the case will be important (but according to whom – the claimant or the defendant, and ascertained how?). The merits of the claim will be important (ditto, and after what length of inquiry?) If  a PCO is given at the permission stage in a judicial review, this may be not too onerous, but in other claims (including statutory challenges where there is no permission hurdle), this is not so straightforward.

Alert readers will have predicted the next question – how do you make the getting of a PCO itself not prohibitively expensive? Because if you do not do so, you deter people from bringing potentially meritorious cases just as much as you do if the costs of trial are prohibitive. Put the other way round, if you make the getting of a PCO fairly straightforward, you encourage claimants to apply for them and defendants to abide the result -without throwing the kitchen sink at the case. The more nuanced you make the process, the more you encourage defendants to try and stifle the case – at birth.”

Sometimes the answers of the A-G and the CJEU foreclose any real argument when the matter gets back to the domestic court. That is highly improbable here. So, as I said before, there is likely to be plenty to argue about when it returns to the Supreme Court.

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