Environmental Judicial Review: Further change on its way

Over recent years, changes have been made to both procedural and costs rules applicable to judicial review in environmental and planning cases. The changes have been designed to address successive governments’ perceptions that the review system was being abused, with claims used as a campaigning tool or to delay legitimate development proposals, and to meet the UK’s obligations under the Aarhus Convention on access to environmental justice. Under Aarhus, the UK is required to ensure that the costs of bringing environmental challenges are not “prohibitively expensive”. The risk to Claimants of having to reimburse a Defendant’s costs in full, in the event of an unsuccessful challenge, had long been considered a deterrent to bringing a claim and thus a bar on accessing justice in environmental claims.

Following a recent government consultation, further significant changes are now to be made to the costs regime for environmental challenges [1]. The changes have the dual purpose of strengthening compliance with the Aarhus Convention and addressing the government’s ongoing perception of abuse. We summarise some of the key practical changes here.

Existing financial caps

The Civil Procedure Rules currently limit the costs that are recoverable by the Claimant or Defendant in an environmental judicial review. The limits are likely to apply to, for example, challenges to decisions relating to environmental permits, or to planning cases that turn on environmental issues such as Environmental Impact Assessment.

Where the protective costs regime applies, if a Claimant is ordered to pay the Defendant’s costs, he/she may not be ordered to pay costs exceeding £5,000 if the Claimant is acting as an individual or £10,000 in all other cases. Where the Defendant is ordered to pay the Claimant’s costs, the Defendant may not be ordered to pay costs exceeding £35,000.

These amounts are fixed by court rules and practice directions with no scope for variation by the court. However, a Claimant may “opt out” of this costs protection either by specifying in the Claim Form that the Aarhus Convention (and therefore the protective costs regime) does not apply or by stating that it does not wish the costs limits to apply.

A Defendant may argue that the Aarhus Convention, and therefore the costs cap, does not apply to a given case. However, the Defendant faces additional costs sanctions where such an argument is unsuccessful.

Variation of financial caps

In the 2013 case of Edwards v Environment Agency [2], the Court of Justice of the European Union set out principles for determining whether the level of costs incurred would be “prohibitively expensive” [3] in any given case. These principles, which were subsequently repeated by the Supreme Court in the same case, provide that the costs of the litigation must not exceed the financial resources of the Claimant and must not appear “objectively unreasonable”, having regard to factors such as the merits of the case. However, the domestic courts do not, at present, have the power to vary the fixed caps of £5,000, £10,000 or £35,000 to take account of what “prohibitively expensive” may mean in an individual case. For this reason, it has been argued that the UK is still not fully compliant with its Aarhus obligations.

Therefore, while the government has chosen to retain the costs caps at their current level, these will now be “default starting points” capable of variation by the court on the application of the Claimant or the Defendant. The amount a Claimant may have to pay could be increased in an appropriate case but, the government says, should only be reduced (i.e. fixed at less than £5,000 or £10,000 as the case may be) in “exceptional circumstances”. The government has rejected concerns that this will lead to additional hearings to deal with applications to vary the cap or to uncertainty for parties.

Multiple claimants or defendants

The new rules will also clarify that, in cases involving multiple claimants or multiple defendants, a separate costs cap will apply to each individual. Objectors have pointed out that this could mean if, say, three claimants were required to pay costs up to the level of their costs cap, collectively they would pay £15,000 whereas if the same case had been brought by an organisation such as a charity or NGO, its total liability under the costs cap would be £10,000. The government has rejected this argument, largely on the basis that costs caps could now be varied in appropriate cases.

Disclosure of Claimant’s financial resource

During a previous consultation exercise in 2013/2014, the government proposed new rules to ensure that all those who support and fund a claim bear the financial risk, even if they are not formally party to the proceedings. It was said that a Claimant would have to provide information about funding at the outset so that the court could identify, and if appropriate make costs awards against, the non-party funders behind the named Claimant.

The issue of disclosing financial resources arose again in the latest consultation in the context of applications to vary the costs caps. For the court to assess whether a variation is appropriate in a given case (and, indeed, for a defendant to know whether it is appropriate to ask the court to afford a Claimant less costs protection than the default starting point), the court (and the Defendant) will need access to information about the Claimant’s financial resources. The new rules will require the Claimant to file and serve a schedule of its financial resources at the start of the proceedings.

Objectors have expressed concern about requirements to disclose information about personal finance with charities expressing concern that disclosure relating to donors would deter donations. The government responds to concerns about privacy by saying that hearings can be conducted in private where they involve confidential information. This will not, though, keep the information wholly confidential given that it will have to be disclosed to the Defendant and, potentially, any Interested Party formally named in the proceedings.

What next?

The government intends to put forward proposed amendments to the Civil Procedure Rules and to invite the Civil Procedure Rule Committee to make the changes as soon as possible. The government also proposes to review the impact of the changes and to consider, within 2 years of their implementation, whether any additional rule changes are required. One specific proposal to be kept under review is whether a range of default costs caps should be introduced in future.

The costs caps set out above do not apply directly to appeals against environmental judicial review decisions. However, the Court of Appeal and Supreme Court have the power to make protective costs orders in appropriate cases. The government has said that it will invite the Civil Procedure Rule Committee to amend the rules to provide greater certainty that the Court of Appeal should award a Claimant costs protection in Aarhus cases and will invite the Supreme Court (which makes its own rules) to make corresponding provisions for the appeal it hears.

There have also been calls for costs capping to be extended beyond statutory review cases to claims against private individuals including, in particular, private nuisance. While the government concluded that the cost capping regime would not necessarily be appropriate in those cases, it said that it would continue to consider how best to address such cases and so it may that rule changes will be proposed for non-JR cases in future.

[1] Costs Protection in Environmental Claims: The government response to the consultation on proposals to revise the costs capping scheme for eligible environmental challenges – Ministry of Justice, November 2016.
[2] Case C-260/11 Edwards v Environment Agency [2013] 1 W L R 2914.
[3] R (Edwards) v Environment Agency (No 2) [2014] 1 W L R 55.

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The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.