The Supreme Court on “prohibitively expensive” costs: Aarhus again

11 December 2013 by

R (Edwards & Pallikaropoulos) v. Environment Agency et al, Supreme Court, 11 December 2013 read judgment

This is the last gasp in the saga on whether Mrs Pallikaropoulos should bear £25,000 of the costs of her unsuccessful 2008 appeal to the House of Lords. And the answer, after intervening trips to the Supreme Court in 2010 and to the CJEU in 2013, is a finding by the Supreme Court that she should bear those costs.

The judgment by Lord Carnwath (for the Court) is a helpful application of the somewhat opaque reasoning of the European Court on how to decide whether an environmental case is “prohibitively expensive” per Article 9(4) of the Aarhus Convention, and thus whether the court should protect the claimant against such liabilities. The judgment also considers the guidance given by A-G Kokott more recently in infraction proceedings against the UK for breaches of that provision: see my post.

But note that the dispute has been largely overtaken by recent rule changes, and so we should start with these before looking at the judgment.

Current Aarhus claims

There are rules governing protective costs orders at each step of the court hierarchy.

(i) At first instance, per CPR 45.41 to 45.44 & Practice Direction 45, someone who after 1 April 2013 brings a judicial review “all or part of which is subject to the provisions” of the Aarhus Convention may not be ordered to pay costs exceeding £5,000 for individuals and £10,000 for others. Costs recovery against a losing defendant (the reciprocal cap, in the jargon: see my post) is usually capped at £35,000. There are also provisions to deter expensive arguments about whether a case is an Aarhus case. If the claimant loses the point, normally no order for costs. If the defendant loses, normally the claimant will get his or her costs on an indemnity basis, even if the total is taken beyond the £35,000.

(ii) On appeal, there are separate rules in CPR 52.9A governing costs recovery, and in particular the need for a prospective order to be made as soon as practicable and on paper, unless the court otherwise orders.

(iii) Finally the Supreme Court may make an order limiting costs recovery in an Aarhus claim (Costs Practice Direction, as amended in November 2013).

This claim

Mrs P’s appeal had a somewhat unusual history, to say the least. The claim started in the name of another claimant (Mr Edwards) who had the benefit of legal aid, and thus costs protection. He had sought judicial review of a decision by the Environment Agency in 2003 (sic!) to allow a cement works to burn waste tyres as an additional fuel. He lost in front of the judge, and, during the hearing of the appeal, withdrew instructions from his legal team. Cue Mrs P, avidly listening in court, who stepped in to take the case over.  Her costs were there and then capped at £2,000, which she paid when she lost.

Mrs P then sought to appeal to the House of Lords. The then rules provided that an applicant provide security in the sum of £25,000. She unsuccessfully sought variation of this, and accordingly was required to pay this into court.

So the upshot of the Supreme Court’s current ruling is that she does not get her £25,000 back – a situation unlike most protective costs fights where the issue is whether the claimant is exposed to a costs burden in the future.

This simple fact weighed heavily with the Supreme Court. Mrs P was not in fact deterred from litigating the case in the House of Lords, and the Supreme Court was ultimately unimpressed with the merits of her claim. The context was thus very different from the far more common case where the liability is prospective: [33].

At [23] Lord Carnwath set out the CJEU learning which amounts to this:

1. The test of prohibitive expense is not purely subjective. The cost of proceedings must not exceed the financial resources of the person concerned nor appear to be objectively unreasonable, at least in certain cases.

2. The CJEU did not give definitive guidance as to how to assess what is objectively unreasonable.

3.  The court could take into account the merits of the case: that is “whether the claimant has a reasonable prospect of success, the importance of what is at stake for the claimant and for the protection of the environment, the complexity of the relevant law and procedure, the potentially frivolous nature of the claim at its various stages.”

4. That the claimant has not in fact been deterred for carrying on the proceedings is not itself determinative.

5. The same criteria are to be applied on appeal as at first instance – though an appellate court should bear in mind what had already been spent on the case.

Step 3, the merits, is less than self-explanatory, and so Lord Carnwath provided the following expansion of the CJEU’s reasoning at [28]

i) A reasonable prospect of success. Lack of a reasonable prospect of success in the claim may, it seems, be a reason for allowing the respondents to recover a higher proportion of their costs. The fact that “frivolity” is mentioned separately (see below) suggests that something more demanding is envisaged than, for example, the threshold test of reasonable arguability.

ii)  The importance of what is at stake for the claimant As indicated by Advocate General Kokott, this is likely to be a factor increasing the proportion of costs fairly recoverable. As she said, a person with “extensive individual economic interests” at stake in the proceedings may reasonably be expected to bear higher risks in terms of costs.

iii)  The importance of what is at stake for the protection of the environment Conversely, and again following the Advocate General’s approach, this is likely to be a factor reducing the proportion of costs recoverable, or eliminating recovery altogether. As she said, the environment cannot defend itself, but needs to be represented by concerned citizens or organisations acting in the public interest.

iv)  The complexity of the relevant law and procedure. This factor is not further explained. Its relevance seems to be that a complex case is likely to require higher expenditure by the respondents, and thus, objectively, to justify a higher award of costs…

v)  The potentially frivolous nature of the claim at its various stages. The respondents should not have to bear the costs of meeting a frivolous claim. In domestic judicial review procedures, whether at first instance or on appeal, this issue is likely to be resolved in favour of the claimant by the grant of permission.

Applying these to Mrs P’s case, the case was evidently a complex one (it took 3 days in the House of Lords), and Lord Carnwath thought that the points of law at stake were of limited practical importance for the environment by the time it had got to the House of Lords. He also considered that the prospects of obtaining a final order in Mrs P’s favour were “highly questionable” because even if there had been an error of law, there was a serious risk of the court’s discretion being exercised against her, as had happened in the courts below: [36].

Hence

in the special circumstances of this case the figure of £25,000…is neither subjectively nor objectively successful. [39]

Comment

That last sentence is key. The Supreme Court has made it clear that this was indeed a special case. Mrs P had paid the money, and the Court could take a long hard look at the merits of the claim in retrospect and as already determined. They evidently thought that there was no good reason why she should get her money back.

In my view, there is nothing in the ruling which should encourage defendants to dispute the application of the default £5,000 protective costs order now contained in the rules. If a judicial review claim has enough merit to clear the arguability hurdle and thus get permission from the court, no first-instance judge looking at the application is going to welcome expensive micro-argument from defendants about just how meritorious, complex or unimportant the claim is. Any different approach, and arguments about “prohibitive expense” will themselves become prohibitively expensive.

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2 comments


  1. James Wilson says:

    There is an obvious breach of the rule of law here. Legislation should be general and apply equally unless there is a good point of principle otherwise. Carving out a special costs restriction for one type of litigation (Environmental, in this case) is a flagrant breach of that principle. No doubt environmental claims are important, but so too are medico-legal cases (which determine our quality of life and indeed life itself in some cases), commercial cases (which determine whether we can earn a living) and indeed potentially _any_ form of litigation depending on the circumstances and the limits of your imagination.

    Moreover, once an exception has been carved out, it provides a fertile source for litigation over whether any particular case falls within the exception. There will no doubt be some cynical cases where an environmental peg is found for what is not really an environmental case at all, or not as intended by the Aarhus draftspeople anyway (see http://ukhumanrightsblog.com/2013/10/09/why-mrs-litvinenko-did-not-get-her-pco-but-what-if-it-had-been-an-environmental-claim/)

    Then we have the equally bad problem identified by Andrew above – if one removes the risk of proceedings for bringing a claim, then the opportunity for what is at best opportunism and at worse blackmail is obvious. Exactly this happened in New Zealand environmental law with its Resource Management Act, which allowed objections to planned development to be made by people who would not bear the cost of their objections failing, so a nice little earner (as they don’t say in that country) was fashioned by those who figured out that they might have their objections bought off …

    Of course, the rule of law also requires that citizens be able to bring proceedings to enforce their rights or clarify their legal position. If the courts are too expensive, all the rights they supposedly uphold will be illusory. But, going back to the first point, this applies to _all_ rights and hence all litigation. There is no justification for special regimes here and there – employment, family, environment, to name just three we presently have – because indigent but worthy claimants can be found everywhere.

  2. Andrew says:

    Any form of litigation in which the Claimant, Applicant, Petitioner, Plaintiff, whoever sets the wheels in motion is not liable for the opponent’s costs if the claim fails – and preferably required to insure the liability – is nothing more than legalised blackmail. That applies to Aarhus claims; to the Employment Tribunals; to most family litigation; and to what little publicly-funded litigation there still is. In the last case where a public-funded litigant loses and a private-paying private-sector litigant wins (unless, perhaps, that litigant was and was bound to be insured) the funding body should be liable for the winner’s costs regardless of the winner’s means. In the case of family and the ET Calderbank offers should be available.

    One of these days the courts here or at Strasbourg will see that the present rule creates a playing field which is as level as the deck of the Titanic when the band played Nearer My God To Thee for the last time.

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courts secret criminal trial secret evidence secret justice Secret trials sectarianism secularism security security cameras security services security vetting Sedar Mohammed segregation Select Committee on AI self-defence self-incrimination seminar sentencing September 11 serco serious harm sermon Seroxat service outside jurisdiction set-off Sewel Convention sex abuse sex ban sex ban low IQ sex offender Sex offenders sex register sexual abuse Sexual Offences sexual orientation sexual orientation regulations SFO investigation sfo unlawfulness shaker aamer Shamima Begum sham marriage shared residence order Sharon Shoesmith shetland shipping shipwreck Shirley Chaplin shooting shoulder shrug should trees have rights SIAC sihkism Simon Singh sir alan ward Sir Nicholas Wall Sir Peter six months rule slander slaughterhouses slavery smacking small claims court small solar Smith Smith & Ors v The Ministry of Defence [2012] EWCA Civ 1365 smog smoking ban Snyder v Phelps social and economic rights social benefits social housing socialite social media social security law social welfare social workers Solicitorsfromhell website solitary confinement soma somali pirates sources South Africa south african constitution sovereignty Sovereignty clause soviet union soybean Spanish properties spare room subsidy special advocate special advocates species specific performance spending cuts spielmann squatters Standing standing rules starvation state immunity statelessness statute statutory power Statutory purpose stay of execution stem cell research stem cells stem cell therapy Stephen Gough stephen sedley stepping hill hospital Sterilisation steve macqueen Steven Neary stobart-law stop and search stop powers Stormont Assembly storms Strasborug Strasbourg Strasbourg Court strasbourg damages pirates strasbourg law Strasbourg terminology strategic environmental assessment strike strike out Strikes student loans sturgeon subsidies Sugar v BBC suicide suicide act 1961 super injunction super injunctions supermax prisons superstition Supreme Court Supreme Court Live Supreme Court of Canada Supreme Court Scotland surgery surrogacy surrogacy arrangement surveillance swine flu Syria systemic violence Take That tallinn tariff Taser Tax tax avoidance tax discrimination tchenguiz technology Telegraph telephone preference service television justice tenancy tent city termination termination of pregnancy terror asset freezing Terrorism terrorism act terrorism act 2000 terrorism legislation terrorism prosecution terrorist finance terrorist threat terry pratchett Tesla testamentary dispositions The Bike Project the Catholic church The Corner House theism The Law in These Parts therapy Theresa May the right to privacy The Stig The Sun third countries third party appeals three way case time limits time limits in human rights Tobacco tobacco cartels Top Gear tort Torture torture inquiry totally without merit TPIM TPP tracking trade trade secrets trades unions trade union congress Trade Unions transexual transsexual transsexuals travel travellers travel restrictions treason treatment treaty treaty accession trial by jury trolling TTIP TTM v London Borough of Hackney & Ors Tugendhat tumour Turkey tweeting in court Twitter twitter in court Twitter Joke Trial UK UK citizenship uk constitution UK election UK Human Rights Blog UK Human Rights Roundup UKIP UK Jewish Film Festival ukraine UK Supreme Court UK Uncut ultra orthodox jews ultra vires UN unable to vote unacceptable behaviour policy unaccompanied minors unborn child UN Convention on the Rights of the Child unelected judges unemployment unfair consultation unfair dismissal unfairness at hearing Unison Unite United Against Fascism Group United Kingdom United Nations United States United States v Windsor universal declaration of human rights universal jurisdiction Universal Periodic Review University University Fees university of east anglia University of Southampton unjust and oppressive unlawful arrest unlawful detention unpaid work schemes UN Resolution unsolicited calls UPR US aviation US Constitution use as of right US Supreme Court vaccination Valkyries variants veganism vehicle breakdown vetting and barring vicarious liability victim victim status Victoria Climbie victorian charter Vienna airport vigilantism villagisation vinton cerf violence violist visa scheme vivisection voluntary euthanasia Volunteers voter compensation voters compensation voting voting compensation vulnerable Wagner Wakefield Wales War war correspondents ward of court War Horse water utilities Watts Wayne Rooney Websites welfare of child welfare of children welfare of the child welfare state welsh bill western sahara whaling What would happen if the UK withdrew from the European Court of Human Rights whimbrel whisky Whistleblowing WHO who is JIH whole gene sequencing whole life orders whorship Wikileaked cable Wikileaks wiklleaks Wild Law wildlife Wildlife and Countryside Act will William Hague William Marbury wills wind farms wind turbine Winterbourne View witchcraft withdrawal of treatment wolves women's rights Woolas worboys Workers working time directive wrongful birth wrongful conception wrongful life WTO wuhan X AND OTHERS v. AUSTRIA - 19010/07 - HEJUD [2013] ECHR 148 X Factor XX v Secretary of State for the Home Department [2012] EWCA Civ 742 X Y and Z v UK Yemshaw Yildirim v Turkey Your freedom website YouTube yukos Yuval Noah Hariri Zakir Naik Zanu-PF Zero Hours Contracts ZH (Tanzania) v Secretary of State for the Home Department Zimbabwe Zimbabwe farm invasions ZN (Afghanistan) (FC) and others ZZ [2015] CSIH 29 [2015] CSOH 168 £750

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