MoJ consults on changes to environmental costs protection regime

The Ministry of Justice has launched a consultation on reforms to the cost protection rules in environmental challenges.

One leading planning barrister, Jenny Wigley of No 5 Chambers, warned that the measures could “drastically reduce the costs certainty currently afforded to judicial review claimants”.

The environmental costs protection regime is governed by Section VII of Part 45 of the Civil Procedure Rules, related parts of the CPR and associated Practice Directions.

Under the Aarhus regime parties to the Convention – of which the UK is one – are required to guarantee rights of access to information, public participation in decision-making and access to justice in environmental matters.

It requires them to ensure the public have access to a procedure to challenge relevant decisions, and specifies that those court procedures should not be ‘prohibitively expensive’.

The current limits in relation to costs liability are £5,000 for individual claimants and £10,000 for organisations. The liability of the defendant is limited to £35,000.

The MoJ consultation paper said the proposals to amend the current regime had arisen in light of:

  • the judgment of the Court of Justice of the European Union (CJEU) in case C-260/11 Edwards v. Environment Agency [2013] 1 W.L.R. 2914;
  • the subsequent judgment of the Supreme Court in the same case: R (Edwards) v. Environment Agency (No.2) [2014] 1 W.L.R. 55; and
  • the judgment of the CJEU in case C-530/11 European Commission v. UK [2014] 3 WLR 853.

In the first ruling the CJEU set out principles, which were subsequently reiterated by the Supreme Court, regarding the approach to determining what level of costs in any particular case would be ‘prohibitively expensive’.

“The judgment suggested that, in meeting the not ‘prohibitively expensive’ requirement, the rules could be significantly more flexible than the Environmental Costs Protection Regime currently provides,” the MoJ consultation paper said.

“For instance, it held that the test of what is ‘prohibitively expensive’ is not purely subjective: the cost of proceedings must not exceed the financial resources of the person concerned and, in addition, the cost must not appear to be objectively unreasonable.”

In February 2014, the CJEU gave its judgment in European Commission v. United Kingdom. It found that the costs regime for environmental judicial review cases which had been in place in the UK in 2010 had not properly implemented the ‘not prohibitively expensive’ requirement as required by the Public Participation Directive.

“it should be noted that the Court was assessing the position before the UK jurisdictions’ costs regimes were revised in 2013," the MoJ noted.

It said, though, that the Government considered there to be scope for making "measured adjustments" to the regime within the framework of the relevant Directives.

“The proposals contained in this consultation are aimed at providing greater flexibility, clarity of scope and certainty within the regime,” the MoJ said.

The main areas of focus of the proposals in the consultation paper therefore are:

  • the scope of the regime in terms of the types of cases that are eligible for costs protection and whether the regime should be extended to apply to certain reviews under statute;
  • the types of claimant eligible for costs protection;
  • the levels of costs protection available and whether they should remain fixed or should be variable; and
  • the factors which courts consider when deciding whether cross-undertakings in damages for interim injunctions are required in cases which fall within the scope of the regime.

Commenting on the MoJ’s proposals, No 5’s Wigley noted how they included a number of restrictions on the ability of claimants to benefit from costs protection.

Amongst these restrictions are:

  • A duty on claimants to provide a schedule of financial resources at the outset, including financial support from others;
  • The intention to restrict the benefit of the provisions to “members of the public” as defined, so as to exclude proceedings brought by public authorities;
  • Possibly raising the standard cost caps to £10,000 for individuals, £20,000 for organisations and reducing the reciprocal cap to £25,000;
  • Giving the court a power “at any time”, to remove or vary the level of cost capping, so long as it is satisfied that to do so would not make the proceedings “prohibitively expensive” for the claimant in terms of exceeding the claimant’s resources, or objectively unreasonable, having regard to various prescribed factors;
  • Making it easier for defendants to challenge whether a claim is eligible by removing the default provision for the defendant to pay indemnity costs should its challenge to eligibility fail.

Wigley added: “The proposed changes rectify some problems with the current rules, by extending their scope beyond just judicial review. However, as they stand, the proposals would drastically reduce the costs certainty currently afforded to judicial review claimants in environmental claims and may fall foul of the purpose behind the Aarhus Convention in that respect.

“The wide scope for the Court to remove or vary the level of cost capping at any time in the proceedings is likely to be particularly problematic for claimants.”

The consultation runs until 10 December.