Aarhus, the A-G, and why the rules on interim remedies need to change

27 September 2013 by David Hart KC

Commission v. UK, Opinion of Advocate-General Kokott, 12 September 2013 read opinion here 

I did an initial post here summarising this opinion from the A-G to the CJEU saying that the UK was in breach of two EU Directives about environmental assessment and pollution control – the breaches concerned our system for litigation costs. It struck me that there was a lot in the opinion, and after some re-reads, I continue to think so. So I will deal in this post with one aspect, namely the finding that the UK is in breach, in requiring an undertaking as to damages by the claimant to back up the claimant’s interim injunction – in the jargon, a cross-undertaking. 

We are back on the well-trodden path of the UN-ECE Aarhus Convention to which the EU has subscribed. Article 9(4) requires that there be review procedures in environmental cases which shall provide “adequate and effective remedies including injunctive relief as appropriate, and be fair, timely and not prohibitively expensive.” And a requirement for a cross-undertaking, the A-G concluded, infringed that provision.

Back to basics. The starting point is that if you want an interim injunction to stop someone doing something until trial of your claim, you must agree to pay the defendant what it cost him in the meanwhile if he wins. So a good example would be you stopping a factory from operating for 6 months because, you said, it was very smelly, and then you losing at trial, because it turns out not to be as smelly as you said it was. If you had given a cross-undertaking, you would be liable for 6 months loss of profits. Unsurprisingly, this is a real deterrent in public law cases, especially environmental ones. The starkest example of this is Lappel Bank – in this, the RSPB who were unwilling to give an undertaking as to damages in respect of the expansion of the port of Sheerness, with the result that no injunction was granted and the development proceeded – only for the ECJ to agree with the RSPB that the expansion was in breach of the terms of the Habitats Directive. By then the protected mudflats and associated waders had disappeared beneath the very nice car park seen in the upper part of my image.

Happily, things have moved on in the UK a bit, particularly in public law challenges, and the courts are now readier to grant injunctions without requiring a cross-undertaking, though may still as a matter of discretion require one, or may disallow the claim for an injunction in part on the basis that a cross-undertaking is not forthcoming – see, e.g. the Bacongo case.

The A-G is of the opinion that the possibility of this requirement being made of a claimant was in breach of Article 9(4).  First, she was unimpressed with the argument that the obligation only applied to legal costs within the procedures, and that damages payable under a cross-undertaking did not fall within those costs. She took a broader view; any financial burden which may arise as a result of the proceedings needed to be assessed, and being asked to pay compensation if the judge goes against you is such a burden.

The fact that

(a) projects often did not in practice proceed if there was a question-mark over their legality and

(b) the courts often exercised their discretion not to require the cross-undertaking

did not fully meet the Commission’s concern. She found a breach in the fact that UK courts

may make necessary measures granting interim relief in proceedings covered by these provisions conditional upon an undertaking to pay damages.

Now to the importance of the words I have italicised in her conclusions. The bulk of the A-G’s reasoning affects all types of proceedings covered by the Aarhus Convention, i.e. environmental public law and private law proceedings, against public authorities and private people. And in private law proceedings, undertakings as to damages are routinely sought and imposed, if not proferred by a claimant. But the A-G’s brief was narrowed by the scope of EU law – because, even though the EU has subscribed to it, Aarhus had only been directly incorporated in two specific directives. – and so she was only able to reach conclusions about proceedings concerning Environmental Impact Assessment and Pollution Control. This is because both those Directives (and successors on similar topics) make express reference to the obligations in Article 9(4) Aarhus terms.

But judicial reviews about those Directives form only part of environmental judicial reviews generally. There is an argument for saying that the A-G’s reasoning applies wherever there is a EU obligation in play – see Lesoochranárske zoskupenie VLK – the Slovakian Bear case. The problem comes when you have a fight on purely domestic law terms; yes, the UK may be in breach of its Aarhus obligation and be told off by the Aarhus Convention Compliance Committee accordingly, but that does not necessarily mean that a judge is obliged to apply this reasoning so as not to require a cross-undertaking. He or she may take Aarhus into account, but it may be said that EU law would not in those circumstances require a specific outcome.

So the really interesting cases will arise when people seek to apply the A-G’s reasoning to the area where a requirement for a cross-undertaking is absolutely commonplace – think my smelly factory example – and where as a result and to date claimants have been very wary indeed about going to court to stop the problem before it can be fully thrashed out at trial.

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Related posts:

• Aarhus: the UK seems to be in trouble, this time with the EU
• The CJEU on “prohibitively expensive” and the new protective costs order regime
• Habitats – how to stop death by a thousand cuts
• Habitats – the CJEU’s judgment in Sweeten