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Costs for judicial review

Money iStock 000008683901XSmall 146x219LexisPSL Government and Morayo Fagborun Bennett set out key provisions in relation to costs for judicial review, covering protective costs orders (PCOs), interveners and costs capping.

A defendant in a judicial review claim will usually be the public authority whose decision, action or omission is being challenged. Any person (other than the claimant and defendant) who is directly affected by a claim may be an 'interested party' for the purpose of that claim (see CPR 54.1(1)(f)) and should be served with the claim under CPR 54.7.

In this article, the LexisPSL Local Government team explain how a defendant or interested party faced with a judicial review claim may encounter difficulties in recovering the costs of proceedings, even when successful. The court's discretion under the Senior Courts Act 1981 is used sensitively so that judicial review cases in the public interest may be supported through protective cost orders (PCOs). This article considers the principles and procedure for issuing PCOs, as well as the rules on interveners and costs capping.

Protective Cost Orders (PCOs)

A PCO limits or extinguishes the amount of costs that a claimant will have to pay if they lose in public law proceedings. PCOs are an exception to the rule that costs follow the event and are not available in a private law action.

PCOs are designed to ensure access to justice is not unjustly impeded. Where granted they enable claimants to present their case to the court with a reasonably competent advocate without being exposed to such serious financial risks that they would be deterred from advancing a case of general public importance, where the court considers that it is in the public interest that an order should be made.

References:

R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, para 76

The general purpose of a PCO is to allow a claimant of limited means access to the court in order to advance their case without the fear of an order for substantial costs being made against them, a fear which would prevent him from continuing with the case at all. The general principles were set out first in R v Lord Chancellor, ex parte Child Poverty Action Group.

References:

R v Lord Chancellor ex p CPAG [1998] 2 All ER 755

Exceptional circumstances justifying the making of PCOs:

  • the court must be satisfied that the issues raised are truly ones of general public importance;
  • the court must be satisfied, following short argument, that it has a sufficient appreciation of the merits of the claim that it can be concluded that it is in the public interest to make the order;
  • the court must have regard to the financial resources of the applicant and respondent, and the amount of costs likely to be in issue;
  • the court will be more likely to make an order where the respondent clearly has a superior capacity to bear the costs of the proceedings than the applicant, and where it is satisfied that, unless the order is made, the applicant will probably discontinue the proceedings, and would be acting reasonably in so doing.

In Corner House (see below) the threshold of the second criteria listed above (the view that must be formed as to the merits of the case) was considered to be too high and reduced so that it was satisfied if the claimant's case was 'properly arguable' or the claimant had real as opposed to fanciful prospects of success.

References:

R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192

Corner House

This case reformulated the guidance provided in R v Lord Chancellor ex p CPAG. The court restated the governing principles as to when it is appropriate to make a PCO:

References:

R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, para 74

Principle 1

A protective costs order may be made at any stage of the proceedings, on such conditions as the court thinks fit, provided that the court is satisfied that:

  • the issues raised are of general public importance
  • the public interest requires that those issues should be resolved
  • the applicant has no private interest in the outcome of the case
  • having regard to the financial resources of the applicant and the respondent(s) and to the amount of costs that are likely to be involved it is fair and just to make the order
  • if the order is not made the applicant will probably discontinue the proceedings and would be acting reasonably in so doing

Principle 2

If those acting for the applicant are doing so pro bono this will be likely to enhance the merits of the application for a PCO.

Principle 3

It is for the court, in its discretion, to decide whether it is fair and just to make the order in the light of the considerations set out above.

Guidance on the form of a PCO was also provided:

References:

R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, para 76

  • where the claimant is seeking a costs order in its favour, if it wins, the court should make an order capping the total amount of costs the claimant can recover including any additional liability for CFA funded claimants
  • a PCO limits or extinguishes the claimant's liability if it loses and should restrict the defendant's liability to a reasonably modest amount, ie solicitors' fees and a fee for a single advocate of junior counsel status that are no more than modest
  • claimants benefiting from a PCO should not expect the capping order accompanying the PCO to permit them to recover anything other than modest representation

The High Court will consider whether the claimant has a 'real prospect of success' using the test in CPR 24 and CPR 52 in forming a view as to the merits of the case.

Form of PCOs

PCOs can take different forms:

References:

R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, paras 146-147

  • a PCO that there will be no order as to costs for claimants represented on a pro bono basis in the substantive proceedings whatever the outcome;
  • a PCO entitling the claimant to recover their costs in full if they win but capping their maximum liability for costs, if they lose;
  • a PCO entitling the claimant to recover their costs in full if they win but that there should no order as to costs if they lose;
  • a PCO entitling the claimant to recover their costs under a conditional fee agreement (CFA) in full if they win but that there should be no order as to costs, if they lose.

In Corner House, a PCO in the form that the claimants would meet a specified amount of the public body's costs if its substantive application was dismissed, or one in which the claimants undertook to seek no order for costs from the defendants if they won, was preferable to an order:

  • prohibiting the defendant from recovering its costs on the judicial review proceedings from the claimant;
  • capping the costs but leaving the level of the cap to be determined by the senior costs judge on application.

In King v Telegraph Group Ltd, the Court of Appeal held that when making any costs capping order the court should prescribe a total amount of recoverable costs which will be inclusive, so far as a CFA-funded party is concerned, of any additional liability.

References:

King v Telegraph Group Ltd [2004] EWCA Civ 613, paras 101-102

Procedure to obtain a PCO

The procedure to apply for a PCO is as follows:

References:

R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, para 78

Application

The application should be sought on the face of the initiating claim form which must be Form N461

 The application should be supported by evidence including the claimants' future costs of and incidental to a full judicial review application

Opposition by public body or interested party

Reasons for resisting should be set out in the Acknowledgement of Service filed under CPR 54.8

Paper consideration

The court will consider whether to make a PCO, its terms and the size of the cap on paper

Oral reconsideration

This should be limited to a one-hour hearing

Costs

The claimants will be liable to pay the public body's costs incurred in successfully resisting a PCO application

The public body's costs and interested party's costs would not normally each exceed £1,000 if the PCO is determined on paper

The public body's costs would not normally exceed £2,500 if the PCO is determined at an oral hearing

An unmeritorious application to set aside a PCO will be met by an order for costs on an indemnity basis against the public body

Defending a PCO

The acknowledgment of service should fully address the points raised by the claimants in relation to the PCO given that it will initially be considered on paper:

  • reasoned written argument should be filed at that stage before the order is made as the court will only set aside a PCO if 'there is a compelling reason for doing so'

References:

  • R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, para 79
  • submissions should address why the claimants do not have a real (as opposed to fanciful) prospect of success

New rules set out under the Criminal Justice and Courts Act 2015

The Criminal Justice and Courts Act 2015 (CJCA 2015) includes a number of provisions which will significantly impact on the recoverable costs in judicial review proceedings once fully in force. The most significant changes are set out in:

References:

The Criminal Justice and Courts Act 2015 (Commencement No. 1, Saving and Transitional Provisions) Order 2015, SI 2015/778

  • CJCA 2015, s 87 (intervener's costs)
  • CJCA 2015, ss 88-90 (costs capping)

Interveners and costs

As a general rule the unsuccessful claimant in judicial review proceedings will not usually be ordered to pay both the costs of the defendant and the interested parties, unless the interested party or parties deal with a separate point in the dispute from those dealt with by the defendant.

References:

Bolton MDC v Secretary of State for the Environment [1996] 1 All ER 184 

However in Salford Estates Ltd v Durham CC, exceptional circumstances were held to exist which warranted an order for costs against the claimant in favour of an interested party in a planning case. The court considered that the claimant should have known, given a decision in a linked case, that it was likely to be unsuccessful.

References:

R (on the application of Salford Estates Ltd) v Durham CC (Costs) [2013] EWHC 776 (Admin)

CJCA 2015, s 87, which came into force on 13th April 2015, amends the costs position of those who voluntarily apply for permission to intervene in a judicial review in the High Court or Court of Appeal. It does not apply where a court, of its own volition, invites an intervener to intervene in the proceedings.

The court can make costs orders for or against interveners under the general discretions in relation to costs. Two main principles apply:

  • Principle 1: except in exceptional circumstances, the court may not order a party to the proceedings to pay the intervener's costs in connection with proceedings (CJCA 2015, ss 87(3)-(4))
  • Principle 2: except in exceptional circumstances, the court must order the intervener to pay any costs specified in an application for costs incurred by a party if specified conditions are met (CJCA 2015, ss 87(5)-(7))

Principle 1

Exceptional circumstances justifying the award of an interested party or intervener's costs from one of the parties might include:

References:

CJCA 2015, ss 87(3)-(4)

  • where the likely outcome was obvious and the party had pressed on regardless
  • where the court has been significantly assisted by the representation of the interested party

The court may consider the following features of the case in considering whether exceptional circumstances apply:

References:

R (on the application of Salford Estates Ltd) v Durham CC (Costs) [2013] EWHC 776 (Admin)

  • the hopelessness of the claim
  • the persistence of the claimant after having been alerted to facts and/or of the law demonstrating its hopelessness
  • the extent to which the court considers that the claimant has sought to abuse the process of judicial review for collateral ends, which is a relevant consideration as to costs at the permission stage, as well as when considering discretionary refusal of relief at the stage of substantive hearing, if there is one
  • whether, the effect of having both sides at the hearing of a contested application, (as a result of the deployment of full argument and documentary evidence by both sides at the hearing of a contested application), gives the unsuccessful claimant the advantage of an early substantive hearing of the claim

Principle 2

References:

CJCA 2015, ss 87(5)-(7)

Absent exceptional circumstances, if one of the following conditions is met, the court must order the intervener to pay any costs specified in an application for costs incurred by a party:

  • the intervener has acted, in substance, as the sole or principal applicant, defendant, appellant or respondent;
  • the intervener's evidence and representations, taken as a whole, have not been of significant assistance to the court;
  • a significant part of the intervener's evidence and representations relates to matters that it is not necessary for the court to consider in order to resolve the issues that are the subject of the stage in the proceedings;
  • the intervener has behaved unreasonably.

These provisions mean that the intervener could be held retrospectively liable for costs if their evidence and representations were not of significant assistance to the court.

Capping of costs

Costs capping orders

A costs capping order is an order limiting or removing the liability of a party to judicial review proceedings to pay another party's costs in connection with any stage of the proceedings. Capping of costs is governed by CJCA 2015 s 88-89 and applies only to public interest proceedings which satisfy the test set out in CJCA 2015, s 88(6).  These provisions are not fully in force at the time of writing (May 2015), however a general summary is set out for completeness.

Judicial review proceedings are defined in CJCA 2015, s 88 as having the following meaning:

References:

CJCA 2015, ss 88(2), (12)

  • proceedings on an application for leave to apply for judicial review
  • proceedings on an application for judicial review
  • any proceedings on an application for leave to appeal from a decision in proceedings described in the two bullet points above
  • proceedings on an appeal from such a decision

Further, the proceedings described in the bullet points above are also 'stages' of judicial review proceedings.

Requirements

Before the High Court or the Court of Appeal can make an order for costs capping the following conditions must be satisfied:

References:

CJCA 2015, s 88

  • leave to apply for judicial review has been granted (CJCA 2015, s 88(3));
  • an application for such a costs order has been made by the applicant for judicial review in accordance with rules of court (CJCA 2015, s 88(4));
  • the following test (in CJCA 2015, s 88(6)) is satisfied: the proceedings are public interest proceedings; in the absence of the order, the applicant for judicial review would withdraw the application for judicial review or cease to participate in the proceedings; it would be reasonable for the applicant for judicial review to do so;
  • 'public interest proceedings' are those which meet the criteria set out in CJCA 2015, s 88(7), namely the following: an issue that is the subject of the proceedings is of general public importance; the public interest requires the issue to be resolved; the proceedings are likely to provide an appropriate means of resolving it;
  • CJCA 2015, s 88(8) lists the matters that the court must have regard of when determining whether proceedings are public interest proceedings: the number of people likely to be directly affected if relief is granted to the applicant for judicial review; how significant the effect on those people is likely to be; whether the proceedings involve consideration of a point of law of general public importance.

Capping of costs orders and their terms

CJCA 2015 contains a number of provisions in respect of judicial review procedure and associated costs. These provisions are not in force at the time of writing (May 2015).

CJCA 2015, s 89(1) lists matters that the court must have regard to in determining whether to make a costs capping order. These include:

(a) the financial resources of the parties to the proceedings, including the financial resources of any person who provides, or may provide, financial support to the parties

(b) the extent to which the applicant for the order is likely to benefit if relief is granted to the applicant for judicial review

(c) the extent to which any person who has provided, or may provide, the applicant with financial support is likely to benefit if relief is granted to the applicant for judicial review

(d) whether legal representatives for the applicant for the order are acting free of charge

(e) whether the applicant for the order is an appropriate person to represent the interests of other persons or the public interest generally

In future, applicants for judicial review will be required to provide to the court certain information about the financing of their claim, (as specified in the CPR), without which permission to proceed with the claim will not be granted.

References:

CJCA 2015, s 85

Senior Courts Act 1981, s 31(3)

Capping of costs in environmental cases

Aarhus Convention

The Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (the Aarhus Convention) provides environmental litigants with enhanced rights of information, participation and access to justice.

References:

Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters

Article 9 of the Aarhus Convention modifies the rules on costs, including those in Corner House in environmental Aarhus Convention cases. An environmental protective costs order is still possible.

In the case of R (on the application of Garner) v Elmbridge BC and others, the Court of Appeal considered whether article 10 of the Environmental Impact Assessment (EIA) Directive, requiring that members of the public with sufficient interest in maintaining the impairment of a right have access to a review procedure before a court of law, means that proceedings should not be prohibitively expensive.

References:

R (on the application of Garner) v Elmbridge Borough Council [2010] EWCA Civ 1006

Directive 83/337/EEC, art 10

The Court modified the Corner House conditions to secure compliance with the EIA Directive, which has direct effect, concluding that the procedure for resolving whether a claimant has sufficient interest must be complaint with article 10 of the EIA Directive and must not be prohibitively expensive. The judge was not entitled to reject the appellant's application for a PCO on the basis that the issues raised were not of general public importance which the public interest required to be resolved. In determining whether the costs are prohibitively expensive, regard should be had to whether the potential costs are prohibitively expensive for an 'ordinary member of the public concerned'. It is the ordinary member of the public with 'ordinary' means that is the test.

References:

R (on the application of Garner) v Elmbridge Borough Council [2010] EWCA Civ 1006

Directive 83/337/EEC, art 10

A PCO was made which imposed a limit of £5,000 on the costs that the claimants would have to pay and a £35,000 limit for the respondent's liability if the claimants were successful.

Civil Procedure Rules

CPR 45.41 to CPR 45.44 deal with the recoverability of costs in Aarhus Convention claims and challenging whether a claim falls under the Convention.

References:

CPR 45.43

CPR PD 45

Fixed costs are payable in Aarhus Convention claims as CPR 45.43 provides that a party to an Aarhus Convention claim may not be ordered to pay costs exceeding the amount prescribed in CPR PD 45.

Paragraph 5 of CPR PD 45 limits the amount of costs that a party can be ordered to pay.

A defendant receiving a claim, which is said to be an Aarhus Convention claim, should check whether this is the case and if not, say so in the acknowledgement of service, as the fixed costs regime will only apply if the claim falls within the regime.

References:

CPR 45.44

CJCA 2015

Section 90 of CJCA 2015, once appointed, will allow the Lord Chancellor to make regulations providing that CJCA 2015, ss 88 and 89 do not apply to judicial review proceedings which deal entirely or partly with environmental issues.

Pre-action protocol for judicial review

Failure to comply with the Pre-action protocol for judicial review where applicable may have adverse consequences in terms of costs. For instance, parties are required to consider alternative dispute resolution (ADR) prior to proceedings being issued. Evidence may be required that ADR was considered. Paragraph 12 of the revised Pre-action protocol for judicial review states that adverse cost consequences may follow for those whose refusal to participate in ADR is considered unreasonable.

References:

Pre-action protocol for judicial review, para 12

Paragraph 13 provides that costs sanctions may be imposed if a defendant fails to disclose at the pre-action stage requested documents which result form a proportionate request and are limited to what is properly necessary to understand the reasons for the challenged decision and enable the issues to be identified.

References:

Pre-action protocol for judicial review, para 13

Paragraph 19 provides that a claimant seeking a protective costs order should explain the reason for so seeking in the letter before claim.

References:

Pre-action protocol for judicial review, para 19

For further information on the Pre-action protocol, see: Judicial review--time limits and the pre-action protocol.

This article was originally published in LexisPSL Local Government in partnership with Morayo Fagborun Bennett of Hardwicke Chambers. If you would like to read more quality articles like this, then register for a free 1 week trial of LexisPSL.