Environmental costs

If a dispute in relation to the appropriate level of costs caps, under the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, were to proceed to a hearing, as opposed to being dealt with on the papers at a time when the claimant’s financial information would remain confidential, the CPR should provide for that hearing to be in private in the first instance. The Planning Court held that that applied equally whether the financial resources in question were those of an individual claimant or of a third party supporter and, accordingly, CPR PD 39 para 1.5 required amendment.

Background

The claimant organisations with a particular interest in the protection of the environment applied for judicial review of the amendments to the CPR Pt 45 by rule 8(5) of the Civil Procedure Amendment Rules 2017, SI 2017/95 (the amendments). The amendments affected changes to the bespoke costs arrangements which arose in cases which involved legal disputes in relation to environmental law and engaged aspects of the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (the Aarhus Convention).

Issues and decisions

(1) Whether the provisions of the CPR which enabled a variation of the costs limits at any point in the litigation were in breach of the requirements of European Union law.

There were two key questions which were raised as to whether or not the existence of CPR Part 45.44 provided the reasonable predictability necessary to ensure that there was sufficient precision and clarity in relation to the potential costs exposure of a claimant, and avoid the chilling or deterrent effect on meritorious claims which was of concern. First, whether there would be a determination of any variation in the costs caps at an early stage of the proceedings so that, absent any other application, the claimant would have reasonable predictability in relation to costs in the event of failure. Second, if there was a determination at an early stage, whether the possible opportunity for later variation of the costs caps conflicted with the requirement that there should be reasonable predictability of the claimant’s costs exposure.

With respect to the first question, it was apparent from CPR 45.4(2)(1)(b) that it was a requirement of the Aarhus costs rules (the ACR) that, if a claimant wished to contend that the claim being brought was an Aarhus Convention claim, it was necessary to file and serve with the claim form a schedule of its financial resources. It was notable that CPR 45.45 effectively stated that the default costs caps would apply unless the defendant had, in the acknowledgement of service, denied that the claim was an Aarhus Convention claim and provided the grounds for doing so. Whilst the provisions of CPR 45.45 did not specifically include a requirement for the acknowledgement of service to specify whether it was the defendant’s case that the default costs caps should be varied if the claim was an Aarhus Convention claim, it was nevertheless clear from the CPR that that issue was potentially to be joined in relation to whether or not the claim was one to which the Aarhus costs rules (the ACR) applied in the acknowledgement of service. As a matter of practice, when a defendant applied its mind to the question of whether or not the claim was an Aarhus claim, it would also have all of the necessary material in the form of the schedule of financial resources to consider whether or not the default costs caps should apply if it was. Any application based on the claimant’s schedule of financial resources should, therefore, be made by the defendant at the stage of filing the acknowledgement of service so that any such application could be addressed by the judge considering the question of permission on the papers.

Therefore, whilst it would have been beneficial for the CPR to have specified within CPR 45.45 that any application to vary the default costs caps should also be included within the acknowledgement of service, nevertheless, as a matter of practice reading the ACR as a whole, if the defendant proposed to contend that the default costs caps should be varied, they needed to do so, and as a matter of proper procedure bearing in mind the overriding objective had to do so, in their acknowledgement of service. The practice of the court would be to expect any disputes in relation to the application of the ACR or the level of cost caps to be raised at the point of acknowledgement of service and resolved by the court at the earliest possible stage of the litigation. Therefore, in relation to the first question, there would be a decision on cost capping at an appropriately early stage of the proceedings.

The second question then fell to be answered in the context that there would have been, at the time when permission was granted, a determination of the applicable costs caps in an ACR claim. If the application was made because the defendant had failed, for whatever reason, to engage with the question of whether or not the default levels of the costs caps were appropriate at the permission stage, it would be too late for that issue to be raised subsequently in the absence of good reason. Such an application would not have been brought as soon as it became apparent that it was necessary or desirable to make it. It would additionally, in principle, be in breach of EU principles.

It had to be accepted that there might be exceptions to that if it was either demonstrated that the claimant had provided false or misleading information in the schedule of financial resources or there had been a material change in the claimant’s financial resources which justified a re-examination of the question of whether or not the default costs caps could be increased without the litigation becoming prohibitively expensive. There was no proper objection to CPR 45.44 applying in those circumstances. A system which provided for the accommodation of variation in the costs caps in those circumstances still remained reasonably predictable.

Accordingly, the provisions of the ACR in relation to varying the costs caps was consistent with the applicable EU law when considered in the context of the surrounding procedural rules and practices (see [36]-[41] of the judgment).

R (on the application of Edwards) v Environment Agency [2006] All ER (D) 309 (Jun) considered; European Commission v United Kingdom: C-530/11 [2014] All ER (D) 121 (Feb) considered; R (on the application of Edwards) v Environment Agency: C-260/11 [2014] All ER (EC) 207 considered.

(2) Whether it was unlawful for the amendments to fail to provide for private hearings when a claimant or a third party supporter’s financial details might be discussed and examined at such a hearing.

If a dispute in relation to the appropriate level of costs caps were to proceed to a hearing, as opposed to being dealt with on the papers at a time when the claimant’s financial information would remain confidential, the rules should provide for that hearing to be in private in the first instance. That was not simply for the same reasons that other analogous hearings identified in CPR PD 39A were to be listed in the first instance in private to preserve confidentiality, but also because the chilling effect which the prospect of the public disclosure of the financial information of the claimant and/or his financial supporters would have on the propensity to bring meritorious environmental claims would be in breach of the requirements to ensure wide access to justice set out in the Court of Justice of the European Union (CJEU) jurisprudence.

The reasons for the first hearing of a dispute in relation to the quantum of the costs cap to be heard in private applied equally whether the financial resources in question were those of an individual claimant or of a third party supporter. Given the breadth of the way in which the amendments, in particular CPR 44.42(1)(b) and 44.44(4), were drafted, it was clear that it was the intention that a defendant should be able to argue that the nature and extent of the sources of third party funding available to a claimant to support the litigation justified a variation in the costs cap. The defendant’s suggestion that the form of financial information required could be in the form provided by CPR PD 46.10 did not obviate that. Therefore, CPR PD 39 para 1.5 required amendment to include the first hearing in relation to disputes over the variation of cost caps in ACR cases (see [57] of the judgment).

R (on the application of Garner) v Elmbridge Borough Council [2011] 3 All ER 418 considered.

(3) Whether the claimants should be granted a declaration that, in the light of CJEU jurisprudence, the claimant’s own costs of bringing the litigation should necessarily be included within the assessment of the financial resources of the claimant for the purposes of evaluating whether or not costs protection should be afforded and whether or not the proceedings were prohibitively expensive.

The defendants accepted the validity of the claimants’ position, namely that a claimant’s costs might be a material matter for the court to consider in determining any application for a variation of the costs caps. That concession was properly made. Therefore, all of the costs potentially involved in bringing a case, including a claimant’s own costs, were matters which could properly be taken into account by the court in assessing whether the default costs caps were appropriate or not.

However, declaratory relief was not necessary. The endorsement of the consensus between the parties as to the legitimacy of taking account of the claimant’s own costs, as a matter of discretion, in considering whether or not the proceedings were prohibitively expensive provided the claimant with everything which might be accomplished by a declaration (see [58], [59] of the judgment).

R (on the application of Purja) v Ministry of Defence [2003] All ER (D) 153 (Oct) applied.

David Wolfe QC and Andrew Parkinson (instructed by Leigh Day) for the claimants.

James Maurici QC (instructed by the Government Legal Department) for the defendants.

Karina Weller - Solicitor (NSW) (non-practising).