THE PUBLIC INTEREST LITIGATION SUPPORT (PILS) PROJECT –
ROUNDTABLE DISCUSSION ON PROTECTIVE COSTS ORDERS
PROTECTIVE COSTS ORDERS IN NORTHERN IRELAND
Introduction
1. Protective Costs Orders (PCOs) arise in the context of a Court’s power to
award costs following its issuance of a judgment in a given case, i.e. a
Court’s costs jurisdiction.1 Whilst ultimately a Court has discretion in
relation to costs, the practice generally to be applied is that ‘costs follow
the event’, i.e. that the loser pays the costs of the successful party.2
2. Consequently addressing the question of funding is a crucial factor at
the outset for any person or organisation interested in litigating an
issue of apparent public import. In the absence of funding, the risk of
litigation loss and subsequent costs liability is one of the main
deterrents to the pursuit of public interest litigation.
3. In Corner House Lord Phillips stated:
There is a public interest in the elucidation of public law by the higher courts in addition
to the interests of the individual parties.3
4. A PCO provides an important mechanism to enable the pursuit of
public interest litigation in circumstances where the Applicant does not
otherwise have adequate funding to risk an unsuccessful outcome. The
purpose of a PCO is to facilitate public interest litigation by reducing or
removing the risk of costs if the litigation is unsuccessful.
5. If litigation is in the public interest, it is obviously not in the public
interest for such litigation to be stymied leaving possible breaches of
public law unchallenged due to prospective litigants lack of funding,
which potentially perpetuates the alleged unlawfulness and injustice.
6. The use of PCOs is integral to the public interest and the needs of
justice:
a. In R (Ministry of Defence) v Wiltshire & Swindon Coroner Collins J
stated:
The principle must be that in the court’s general discretion in relation to costs,
and, more importantly, in ensuring that there is proper access to justice and if
the needs of justice require, appropriate orders can be made. 4
See the Rules of the Court of Judicature (NI) 1980, Order 62. (To be read in conjunction with Order 1 Rule
1A – the overriding objective.) See also Valentine Civil Proceedings The Supreme Court, Chapter 17.
2 The Rules of the Court of Judicature (NI) 1980, Order 62 Rule 3(3)
3 R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192 at para 70.
4 [2005] EWHC 889
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b. Michael Fordham in the sixth edition of the Judicial Review
Handbook5 states:
The public interest is well recognized as influencing costs in judicial review.
Courts can decide in appropriate cases that claimants:
(1) should have early certainty that they will be responsible for no or capped
costs; or,
(2) should not face costs orders where their claims have failed. In truth public
law costs principles need a bold and far-reaching reexamination.
7. In Northern Ireland it appears reasonable to anticipate greater PCO use:
a. The Costs Protection (Aarhus Convention) Regulations (Northern
Ireland) 2013 provide for the use of PCOs in a broad range of
environmental cases (including many planning cases).6
b. The tightening of legal aid purse-strings may be an influencing
factor in this area as it may require lawyers to contemplate
alternative means to fund litigation.
8. Also, PCOs are arguably of greater significance in Northern Ireland than
elsewhere in the United Kingdom, given the current restrictions in this
jurisdiction on the use of contingency fees.7
9. Finally, the use of PCOs usually involves a prudent and appropriate
approach to costs on the part of the Applicant’s legal advisors i.e. acting
pro bono or for a much reduced fee.
10. In Northern Ireland PCOs are occasionally sought and granted in JR.
They can play a pivotal role in changing the law and public authority
policy and practice. A PCO was obtained in 2013 in a health and social
care JR (with the assistance of PILS) which enabled the case to be
argued at first instance. Whilst unsuccessful at first instance, the case
was ultimately successful, resulting in a clarification of the law on a
liberty issue as well as forcing a change in the policies and practices of a
Health and Social Care Trust.8
11. The following paragraphs outline an overview of the relevant prevailing
law concerning PCO’s in the United Kingdom in the context of Judicial
Review (JR).
Relevant law – an overview
Paragraph 18.3.
A summary of the Regulations is contained in the attached Seminar Handout.
7 See The Solicitors Practice Regulations (NI) 1987 at regulation 17 which provides “A solicitor shall not
accept instructions in respect of any claim or in relation to any matter in circumstances or under any
arrangement whereby he will receive, in respect of such claim or matter a contingency fee; and a solicitor shall
not make any agreement with his client for payment of his fees in respect of contentious business done or to be
done by way of a gross sum commission or percentage otherwise than in accordance with the Attorneys and
Solicitors Act 1870 or any statutory modification or re-enactment thereof.” (It is notable that in 2013 the
Department of Justice consulted on the matter of Alternative Methods of Funding Money Damages Claims.)
8 JMCA Re Judicial Review [2013] NIQB 77 (18 July 2013); JMCA v The Belfast Health and Social Care Trust
[2014] NICA 37 (12 May 2014)
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12. The seminal case on PCOs is the English case, Corner House.9 In that
case, the Court set out governing principles as follows:
(74) We would therefore restate the governing principles in these terms. (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:
(i)
the issues raised are of general public importance;
(ii) the public interest requires that those issues should be resolved;
(iii) the applicant has no private interest in the outcome of the case;
(iv) 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; and
(v) if the order is not made the applicant will probably discontinue
the proceedings and will be acting reasonably in so doing.
(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.
(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.
13. Whilst the jurisprudence has developed since Corner House, the
principles established in that case remain foundational not only in
England but also in Northern Ireland.
14. In applying for a PCO (except in Aarhus Convention cases – see below)
there are five key issues to be addressed by a Court :
a. Are the issues of general public importance?
b. Does the public interest necessitate resolution of the issue?
c. Has the Applicant a private interest in the outcome;
d. Given the financial resources of the parties, is it fair and just to
make a PCO?
e. Is the Applicant unlikely to pursue the matter without an Order.
15. The law was clarified and developed in R (Compton) v Wiltshire Primary
Care Trust.10 Therein the Court of Appeal (in England) explained that
‘general public importance’ and ‘public interest’ did not mean the
‘national interest’. The Court also clarified that there was no added
criterion of exceptionality.11
Edwards and the Aarhus Convention12
16. The legal landscape has changed following the case of R (Edwards and
Another) v Environment Agency and Others (No. 2) [2013] UKSC 78
together with the legislative and procedural changes that resulted from
the Government’s consideration of the issues raised by the litigation.
17. The jurisprudence on costs in the Edwards cases evolved out of a
R (Corner House) v Department of Trade and Industry [2005] 1 WLR 1436. See the insightful article
“Protective Costs Orders” by Stein and Beagant [2005] JR 206.
10 [2008] EWCA Civ 749
11 A useful contemporary window into legal developments is the Judicial Review Handbook by Fordham; see
Sixth Edition paragraph 18.3 entitled Costs and the public interest.
12 http://www.legislation.gov.uk/nisr/2013/81/contents/made
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challenge to Environmental Agency permission for a cement works in
Rugby to use shredded tyres for fuel. In 2003 Mr Edwards obtained
legal aid and permission to pursue the challenge against the Agency’s
decision. The application was dismissed.
18. The matter was unsuccessfully appealed to the Court of Appeal.
However, during the appeal Mr Edwards withdrew his instructions
from his lawyers and Mrs Pallikaropoulos was joined as an additional
Appellant. Her costs were capped at £2000.
19. She was given leave to appeal by the House of Lords and applied for a
PCO. The Aarhus Convention at Article 9 provides that access to a
review should be free of charge or inexpensive. The PCO application
was rejected on three main grounds:
a. That various factors, including the Applicant’s means and the
means of those she represented, were not immaterial;
b. That a PCO was not proportionate given the issues and
information before the Law Lords;
c. The proposed appeal was not considered ‘prohibitively expensive’
or that Directive 2003/35/EC would be breached without a special
order.
20. The Appellant paid the £25,000 security for costs and the appeal
proceeded. The appeal was dismissed. The Respondents obtained an
order for their costs. Their combined costs amounted to some £88,000.
Their costs were subject to assessment. The assessors determined as a
preliminary issue that they should disallow any costs which were
prohibitively expensive, in line with the Directive. The Respondents
applied to the Law Lords for a review of this preliminary decision. The
judgment of Sullivan LJ in R (Garner) v Elmbridge Borough Council
[2011] 3 All ER 418; [2010] EWCA Civ 1006 was referenced to highlight
an “important point of principle”, as to whether the question should be
approached objectively or subjectively:
“Should the question whether the procedure is or is not prohibitively expensive be decided
on an ‘objective’ basis by reference to the ability of an ‘ordinary’ member of the public to
meet the potential liability for costs, or should it be decided on a ‘subjective’ basis by
reference to the means of the particular claimant, or upon some combination of the two
bases?” (para 42)
21. Sullivan LJ had taken the view that a purely subjective approach would
be inconsistent with the objectives underlying the Directive.
22. Lord Hope thought it plain that the “difficult issues” highlighted by
Sullivan LJ had not been previously addressed by the House of Lords in
the present case, either when declining to make a PCO or in its final
order for costs; both decisions apparently based on a “purely
subjective” approach. He concluded that there was “no clear and simple
answer”, and that accordingly a reference should be made to the CJEU
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for guidance, the order for costs stayed in the meantime.
23. In the meantime the Government consulted on the general issue “Costs
Protection for Litigants in Environmental Judicial Review Claims”
(CP16/11 October 2011). The consultation resulted in proposals
contained in the Report on Response to Consultation (CP(R) 16/11
August 2012). These proposals were given effect by amendment to the
CPR - an update dated 1 April 2013 summarising the changes as
follows:
Amendments are made to comply with the Aarhus Convention so that any system for
challenging decisions in environmental matters is open to members of the public and is not
prohibitively expensive. Two limits are set: on the costs recoverable by a defendant from a
claimant (£5,000 where the claimant is an individual and £10,000 in any other
circumstances) and; on the costs recoverable by a claimant from a defendant (£35,000).
Consequential amendments are made to PD 25A, Part 54 and the Pre-Action Protocol
Judicial Review. The amendments do not apply to a claim commenced before 1 April 2013.
24. For appeals a new rule was added in CPR 52 :
52.9A.
(1) In any proceedings in which costs recovery is normally limited or excluded at first
instance, an appeal court may make an order that the recoverable costs of an appeal will be
limited to the extent which the court specifies.
(2) In making such an order the court will have regard to –
(a) the means of both parties;
(b) all the circumstances of the case; and
(c) the need to facilitate access to justice.
(3) If the appeal raises an issue of principle or practice upon which substantial sums may
turn, it may not be appropriate to make an order under paragraph (1).
(4) An application for such an order must be made as soon as practicable and will be
determined without a hearing unless the court orders otherwise.
25. In the Supreme Court, the Costs Practice Direction No 13 (as amended
with effect from November 2013) now includes specific provision for
“an order limiting the recoverable costs of an appeal in an Aarhus
Convention claim” (para 2.2.c).
26. The CJEU gave judgment and the case was sent back to the Supreme
Court. Lord Carnwath, giving the Judgment of the Supreme Court,
summarised the decision of the CJEU in his judgment as follows:
21 The court reaffirmed the principles established in its judgment in Commission of the
European Communities v Ireland (Case C-427/07, BAILII: [2009] EUECJ C-427/07)
[2010] Env LR 123; [2009] ECR I- 6277 , noting in particular that Aarhus Convention
does not affect the powers of national courts to award “reasonable costs”, and that the
costs in question are “all the costs arising from participation in the judicial proceedings”
(paras 25–27). In response to the questions raised by the Supreme Court, it began by
affirming the duty of member states to ensure that the directive is “fully effective”, while
retaining “a broad discretion as to the choice of methods” (para 37). The national court,
in turn, when ruling on issues of costs, must satisfy itself that that requirement has been
complied with, taking into account “both the interest of the person wishing to defend his
rights and the public interest in the protection of the environment” (para 35).
22 The following paragraphs of the judgment, which contain the substantive guidance,
must be set out in full:
40. That assessment cannot, therefore, be carried out solely on the basis of the
financial situation of the person concerned but must also be based on an objective
analysis of the amount of the costs, particularly since, as has been stated in para
5
32 of the present judgment, members of the public and associations are naturally
required to play an active role in defending the environment. To that extent, the
cost of proceedings must not appear, in certain cases, to be objectively
unreasonable. Thus, the cost of proceedings must neither exceed the financial
resources of the person concerned nor appear, in any event, to be objectively
unreasonable.
41. As regards the analysis of the financial situation of the person concerned, the
assessment which must be carried out by the national court cannot be based
exclusively on the estimated financial resources of an ‘average’ applicant, since
such information may have little connection with the situation of the person
concerned.
42. The court may also take into account the situation of the parties concerned,
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 and the potentially frivolous nature
of the claim at its various stages: see, by analogy, DEB Deutsche Energiehandelsund Beratungsgesellschaft mbH v Bundesrepublik Deutschland (Case C-279/09,
BAILII: [2010] EUECJ C-279/09) [2010] ECR I-13849 , para 61.
43. It must also be stated that the fact, put forward by the Supreme Court of the
United Kingdom, that the claimant has not been deterred, in practice, from
asserting his or her claim is not in itself sufficient to establish that the proceedings
are not, as far as that claimant is concerned, prohibitively expensive for the
purpose (as set out above) of Directives 85/337 and 96/61 .
44. Lastly, as regards the question whether the assessment as to whether or not
the costs are prohibitively expensive ought to differ according to whether the
national court is deciding on costs at the conclusion of first instance proceedings,
an appeal or a second appeal, an issue which was also raised by the referring
court, no such distinction is envisaged in Directives 85/337 and 96/61 , nor,
moreover, would such an interpretation be likely to comply fully with the objective
of the European Union legislature, which is to ensure wide access to justice and to
contribute to the improvement of environmental protection.
45. The requirement that judicial proceedings should not be prohibitively
expensive cannot, therefore, be assessed differently by a national court depending
on whether it is adjudicating at the conclusion of first-instance proceedings, an
appeal or a second appeal.
27. Lord Carnwath then provided the Supreme Court’s reasoning the
import of the European Court’s judgment and the Respondent’s review:
23 A number of significant points can be extracted from the Edwards judgment:
i) First, the test 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”. (The meaning of the latter
qualification is not immediately obvious, but it may be better expressed in the
German version “in Einzelfällen”, meaning simply “in individual cases”.) The
justification is related to the objective of the relevant European legislation
(referred to in para 32 of the judgment), which is to ensure that the public “plays
an active role” in protecting and improving the quality of the environment.
ii) The court did not give definitive guidance as to how to assess what is
“objectively unreasonable”. In particular it did not in terms adopt Sullivan LJ's
suggested alternative of an “objective” assessment based on the ability of an
“ordinary” member of the public to meet the potential liability for costs. While the
court did not apparently reject that as a possible factor in the overall assessment,
“exclusive” reliance on the resources of an “average applicant” was not
appropriate, because it might have “little connection with the situation of the
person concerned”.
iii) The court could also take into account what might be called the
“merits” of the case: that is, in the words of the court, “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. (para
42)
iv) That the claimant has not in fact been deterred from carrying on the
proceedings is not “in itself” determinative.
6
v) The same criteria are to be applied on appeal as at first instance.
24 I do not understand the last point as intended to imply that the same order must be
made at each stage of the proceedings, or that there should be a single global figure
covering all potential stages, but rather that the same principles should be applied to the
assessment at each stage, taking account of costs previously incurred. In her 2013 opinion
in Commission of the European Union v United Kingdom (Case C-530/11, BAILII: [2013]
EUECJ C-530/11) , the Advocate General said of the court's reasoning on this point:
“that finding cannot be interpreted as meaning that in assessing the permissible
cost burden in appeal proceedings the costs already incurred in courts below may
be ignored. Instead, each court must ensure that the costs at all levels of
jurisdiction taken together are not prohibitive or excessive.” (para 23)
25 However, as she had recognised in her earlier opinion (2012 opinion in Edwards v
Environment Agency (No. 2) (Case C-260/11) [2013] 1 WLR 2914 , paras 58–61), while
“prohibitive costs must be prevented at all levels of jurisdiction”, the considerations may
differ at each level. Thus, on the one hand, as she notes, the decision of the House of Lords as
the final court was potentially of special *332 significance, because it alone had a duty to
make a reference to the CJEU in case of doubt as to EU law. On the other hand, it is possible
that after the decision by the lower court, public interest in the further continuation of the
proceedings would be reduced. Accordingly, she said, it was compatible with Aarhus tests
“to re-examine at each level of jurisdiction the extent to which prohibitive costs must be
prevented”.
26 More generally, in her 2012 opinion, in support of the need for account to be taken of
both objective and subjective considerations, she had emphasised the importance of the
public interest in the protection of the environment:
“42. Recognition of the public interest in environmental protection is especially
important since there may be many cases where the legally protected interests of
particular individuals are not affected or are affected only peripherally. However,
the environment cannot defend itself before a court, but needs to be represented,
for example by active citizens or non-governmental organisations.”
Conversely:
“A person who combines extensive individual economic interests with proceedings
to enforce environmental law can, as a rule, be expected to bear higher risks in
terms of costs than a person who cannot anticipate any economic benefit. The
threshold for accepting the existence of prohibitive costs may thus be higher
where there are individual economic interests.” (para 45)
27 It is less clear how the court saw the “merits” of the case (para 23(iii) above) being
brought into account. There is in the judgment no indication as to how the identified factors
might affect the ultimate level of recovery, one way or the other. (The comparison there
drawn with DEB Deutsche Energiehandels-und Beratungsgesellschaft mbH v
Bundesrepublik Deutschland (Case C-279/09, BAILII: [2010] EUECJ C-279/09) [2010] ECR
I-13849 provides little direct assistance. That case was not related to environmental law,
and it concerned the circumstances in which legal aid should be granted to a claimant,
rather than the extent of his potential liability to the other party.)
28 Taking the points in turn I would suggest the following:
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
7
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. Although mention is only made of complexity of law or procedure,
the same presumably should apply to technical or factual complexity.
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.
The Present Case
29 The present case is unusual in that the Aarhus issue did not arise in the same form at a
lower level. Full protection at first instance was given by legal aid. In the Court of Appeal
the costs cap provided for Mrs Pallikaropoulos reflected the unusual circumstances in which
she became a party, and the court's view that it was in the public interest that the case
could be completed with the same representation. It therefore provides no guide to the
appropriate order on the further appeal. On the other hand, as Lord Hope recognised, the
initial *334 decision of the House itself not to provide any costs protection was made
without full consideration of all the factors now known to be relevant.
30 The respondents are not now seeking recovery of their full costs. They have agreed to
limit their joint claim to £25,000, which is the amount of the security already paid by the
appellant as the condition for bringing the appeal. There is limited evidence as to the
resources of the appellant herself, and none that an order for payment of the sum of
£25,000 already in court would be beyond her means or cause her hardship. Furthermore, it
must be assumed that following the refusal of a protective costs order in March 2007, her
decision to proceed was made with full knowledge of the risks involved. It is impossible in
my view on the material before us to hold that the order sought would be “subjectively”
unreasonable.
31 The more difficult question is whether there should be some objectively determined
lower limit, and if so how it should be assessed. Although this was one of the main issues
raised by the reference, the European court has not offered a simple or straightforward
answer.
32 Mr Wolfe relies on the last sentence of para 40 of the judgment in Edwards v
Environment Agency (No. 2) (Case C-260/11) [2013] 1 WLR 2914 , supported as he says by
the Advocate General's 2013 opinion in Commission of the European Union v United
Kingdom (Case C-530/11, BAILII: [2013] EUECJ C-530/11) , para 55:
“the correct position is that litigation costs may not exceed the personal financial
resources of the person concerned and that, in objective terms, that is to say,
regardless of the person's own financial capacity, they must not be unreasonable.
In other words, even applicants with the capacity to pay may not be exposed to
the risk of excessive or prohibitive costs and, in the case of applicants with limited
financial means, objectively reasonable risks in terms of costs must in certain
circumstances be reduced further .” (emphasis added)
Thus, he says, it is necessary to start from an objectively defined standard, the
circumstances of the particular individual being relevant only to the extent that they may
reduce that figure. Furthermore, in his submission, the question of what is objectively
reasonable was answered definitively by the government itself, when following extensive
consultation it adopted the figure of £5,000 (as now embodied in the High Court rules ). As
he submits, the respondents cannot properly go behind that figure, at least without
evidence to support any alternative suggestion.
33 I am doubtful whether so prescriptive an approach can be extracted from the European
court's decision. If it were, it is difficult to see how the “merits” factors would play a
significant part. In any event, I cannot agree that the respondents are bound by the figure of
£5,000 adopted for the purpose of the new rules. The new rules only apply to proceedings
commenced after June 2013. More importantly, they recognise (as did the Advocate
General: para 25 above) that, while the same general principles apply in the Court of
Appeal, the factors affecting the judgment of what is subjectively or objectively reasonable
may have changed. This applies with even more force at the highest level, where the case for
a second appeal needs special justification. Furthermore, the factors which justify a
relatively low standard figure for an advance cap, including the desirability of avoiding
satellite litigation in advance of a hearing on the merits, will not apply with the same force
to consideration after the event. At that stage the court will be in a much better position to
take a view on both the “merits” of the case (in the sense discussed above) and on the costs
8
incurred and their consequences for the parties. The test in principle remains the same but
the court is considering it in a different context.
34 Of the five “merits” factors mentioned by the court, I would discount the second and fifth
immediately. There is no evidence that the appellant had any economic interest of her own
in the proceedings, and, given the grant of permission at each stage, including the appeal to
the House of Lords, they could not be said to be frivolous.
35 The relative complexity of the case (factor (iv)) is evidenced by the fact that it took three
days before the House. It has not been suggested that the costs incurred by the respondents
were excessive in respect of the issues involved in the case. They are not out of line with
those incurred by the appellant. The £25,000 now claimed represents a very significant
reduction from that figure.
36 The other two factors – (i) the prospects of success and (iii) the importance of the case
for the protection of the environment – are at best neutral from the applicant's point of
view. The issue of construction of the EIA Directive was one of some difficulty, as is clear
from the division of views within the House. However, by the time it reached the House it
seems to have become a point of limited practical significance for the protection of the
environment in the area, given the *336 judge's unchallenged finding on that aspect. Nor
was there any clear evidence of more general public support for her appeal at this level.
Furthermore the prospects of a final order in her favour in the appeal were highly
questionable. Whatever the answer to the bare legal issue, there was a serious risk of the
court's discretion being exercised against her, in the same way as had happened in the
lower courts. Accordingly, the potential significance of the legal issue in my view carries
relatively little weight in the overall balance. The alternative disclosure issue had been
overtaken by events, as the Court of Appeal had held, and the House confirmed.
37 Taking all these factors into account, I find it impossible to say that the figure of £25,000,
viewed objectively, is unreasonably high, either on its own or in conjunction with the £2,000
awarded in the Court of Appeal.
38 Mr Wolfe submits that if this court has any doubt as to his interpretation of the
European court's decision and the Advocate General's opinions, we should delay matters
until the final judgment in the infraction proceedings. I do not think that is necessary or
desirable. Resolution of this case has already been long delayed. The European court has
given such specific answers as it thought appropriate to the questions referred in the
present case. Although they leave some scope for judgment in their application, there is
nothing in the Advocate General's later opinion, in my view, which suggests that more
definitive guidance for the purposes of the present case is to be expected from the
forthcoming judgment.
39 In conclusion, I am satisfied that in the special circumstances of this case the figure of
£25,000 now claimed by the respondents is neither subjectively nor objectively excessive.
Accordingly, I would make an order for costs in that amount in favour of the respondents
jointly.
28. The headnote for the Supreme Court case in Edwards, as appearing on
Lexis, usefully reads as follows:
The test under the Aarhus Convention on Access to Information, Public Participation in
Decision-Making and Access to Justice in Environmental Matters 1998 (Aarhus, 25 June
1998; ST 24 (2005); Cm 6586) (the Aarhus Convention) for whether the cost of litigation
in environmental matters is or is not prohibitively expensive 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 individual cases. The Court of Justice of
the European Union has not given definitive guidance as to how to assess what is
'objectively unreasonable'; it has not in terms adopted an 'objective' assessment based on
the ability of an 'ordinary' member of the public to meet the potential liability for costs.
While the Court of Justice has not rejected that alternative as a possible factor in the
overall assessment, 'exclusive' reliance on resources of an 'average applicant' is not
appropriate, because it could have 'little connection with the situation of the person
concerned'. A court could also take into account what might be called 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
9
complexity of the relevant law and procedure, the potentially frivolous nature of the
claim at its various stages'. That a claimant has not in fact been deterred from carrying
on the proceedings is not 'in itself' determinative. The same criteria are to be applied on
appeal as at first instance.
29. Whilst the Edwards case and the legislative and procedural changes
driven by the Aarhus Convention concern challenges to environmental
matters, it can be anticipated that principles developed in that context
may influence the law governing PCOs more generally.13
Northern Ireland caselaw
30. Whilst the caselaw on PCOs in Northern Ireland is limited to four
judgments, they make illuminating reading. Significant extracts of
relevant judgments are outlined below for the reader’s full benefit of
the local jurisprudence.
31. The first case in Northern Ireland with a PCO in operation appears to
have been Friends Of The Earth, Re Application for Judicial Review [2006]
NIQB 48 (28 June 2006). The PCO in this case was pursuant to
agreement between the parties. The judgment makes no mention of it.
32. The first Northern Ireland judgment dealing with PCOs appears to be
Moore, Re Application for Judicial Review [2007] NIQB 23. In that case
the Applicant made a pre-leave application for a PCO to facilitate a
challenge to proposed landscaping and other such work at Clandeboye
Place for which the Northern Ireland Housing Executive has obtained
planning permission.
33. The Court (Gillen J) dismissed the application. The judgment of the
Court reads as follows:
[1] In this matter the applicant James Moore applies for an interlocutory order that no
order for costs be made against him whatever the outcome of judicial review proceedings
instituted by him in relation to an application made to the Planning Service (Downpatrick)
("PS") by the Northern Ireland Housing Executive (Newtownards) ("HE"). Counsel on behalf
of the respondent PS accepts that the court has a discretion to make such an order pursuant
to RSC. (Northern Ireland) Order. 62, r. 3(3) as considered in the leading authority of R v
Lord Chancellor, ex parte Child Poverty Action Group 1999 1 WLR 347. Leave has not yet
been granted in this matter. However this application was an inter partes matter on notice
to the respondent. Factual background
[2] The factual background in this case arises out of proposed works at Clandeboye Place,
Bangor to which the applicant objects. The area consists of a tarmaced road surrounded by
semi-detached housing. Of the 26 houses in Clandeboye Place 22 are owned by the HE and
each of these houses has recently been subject to a scheme of refurbishment. In the
aftermath of the refurbishment of the HE's houses the HE propose the current project which
principally consists of the provision of 40 parking bays within the tarmaced road area to be
used by residents for visitors. In addition the scheme envisages, inter alia, the planting of
13
See Thompson at para 13.
10
trees around the tarmaced area, the positioning of an entrance feature at the entrance to
the area and the improvement of footpaths in the area by changing the layout and
providing a black asphalt finish. Planning permission for the project has been obtained from
the PS. (These facts are well summarised by Girvan J (as he then was) in a case of similar
title to this, unreported, GIRC5648) ("the earlier case").
[3] It is relevant to note at this stage that the original planning application by the HE
was made on 15 April 2003. Approval was not forthcoming until 1 August 2006. In the
interim, Mr Moore had sought judicial review of the proposed works. In the earlier case
Girvan LJ had granted leave on only one ground namely that the works proposed
constituted redevelopment of the area and that the Housing (Northern Ireland) Order 1981
("the 1981 Order") contained a specific set of revisions relating to the redevelopment in
Chapter III of Part III of the 1981 Order. It was Mr Moore's contention that the Executive
could not satisfy the pre-conditions which must be fulfilled for an area to qualify as a redevelopment area and hence it had no power to carry out the proposed works. Having
granted leave in September 2005, Girvan LJ refused the application at a full hearing in
September 2006. That decision has now been referred to the Court of Appeal and a hearing
is pending.
[4] The current application for judicial review by Mr Moore, dated 31 October 2006
again seeks to quash the planning approval. Mr Moore is unrepresented and he sets out
eleven grounds in his application which can be best summarised as follows: (a) That the
PS failed to ensure that the application had appropriate finalised drawings lodged by the
HE so that they could be properly inspected by the public. He alleges that the PS allowed
major changes to the original scheme without publicising these in the public domain.
One of the key issues here was that of tree planting. Mr Moore alleged before me that the
PS had permitted amendment of the plans to include what he described as "a forest" and
which he alleged constituted a major variation of the original plan.
(b) The PS had
defaulted on an arrangement to keep him informed about developments. Mr McMillen, who
appeared on behalf of the respondent, claimed that Mr Moore was invoking his right to view
documents by making advanced block bookings which resulted in the PS having to commit
dates which might have been available for other members of the public. Accordingly the PS
agreed to send documents to him in the event of any major change taking place. It is Mr
Moore's case that the PS has failed to honour that commitment.
(c) The PS has yielded its
discretionary powers to the HE and in particular sought and took advice from the HE before
making a determination. Mr McMillen denied that the PS had ceded the decision-making
process to HE.
(d) Mr Moore seemed to raise again the issue of redevelopment which is
currently before the Court of Appeal. In this context Mr Moore asserted that the PS had
wrongly determined the application whilst court proceedings were still pending.
(e)
Finally Mr Moore asserted that the matter had been going on for so long now that it would
be cheaper and more expedient to commence a new planning application. He adverted also
to the alleged impossibility of his engaging and retaining legal representation. He asserted
that it was a misuse of public funds for Government officials to engage in legal proceedings
in these circumstances when he is unrepresented.
[5] Mr Moore augmented these matters set out in his written application with the
following oral submissions before me: (a) He drew my attention to a petition, a copy of
which was before me ,of residents in the area addressed to the Housing Executive asserting
that they do not want the proposal concerned. Mr Moore recorded that he had lived in this
area a life time and that this proposal will have a detrimental effect on the amenities of the
area.
(b) He asserted that the proposal and the granting of permission had come about
through maladministration.
(c) All he desired was a fresh adjudication with clear
drawings which can only be secured by a new initiative and a new planning
application.
(d) Mr Moore asserted that he was acting on behalf of his community and
future communities in the area. (e) The applicant asserted that his previous application
was mounted prior to the impugned determination by the planning authorities and
therefore this current application is of a different genre. He argued that it was a matter of
public interest to ensure that the Planning Service handled applications such as this
properly and fairly. It was a matter of public interest that the Planning Service had relied
on advice from the NIHE before the determination. It was also a matter of public
importance that the PS had failed to honour their commitment to him to provide him with
appropriate documentation. In essence he said that this was a case of cronyism between
Government departments namely the Department of the Environment, the Department of
Regional Development and the NIHE. They had been jointly and severally acting unlawfully.
11
R v Lord Chancellor, ex parte Child Poverty Action Group 1999 1 WLR 347 and others
("the CPAG case")
6] I consider this case to be the leading authority on the issue of pre-emptive orders for
costs. The researches of Mr McMillen on behalf of the respondent have not discovered any
case in Northern Ireland in which this court has been asked to make such a similar
determination. In CPAG the applicant was a registered charity which was widely recognised
as a leading anti-poverty organisation in the United Kingdom. A second applicant was
Amnesty International a human rights organisation of international standing. That case
arose out of an application to judicially review and quash the decision of the Lord
Chancellor to refuse to extend the availability of legal aid to representation in any cases
before Social Security Tribunals or Commissioners. The second application by Amnesty
International arose out of a judicial review application to quash the decision of the DPP not
to prosecute two individuals. Each applicant sought that no order as to costs be made
against them whatever the outcome of the proceedings on the ground that the applicants
were acting pro bono publico in bringing the matters before the court.
[7] These applications were refused for the following reasons: (i) Under Ord. 62, r. 3(3)
the starting point was that costs were to follow the event and the discretion to make preemptive orders, even in cases involving public interest challenges, should be exercised only
in the most exceptional circumstances.
(ii) That the necessary conditions for such an
order were that the court was satisfied both that the issues raised were truly of general
public importance and that it had a sufficient appreciation of the merits of the claim to
conclude that it was in the public interest to make the order. Unless the court could be so
satisfied by short argument, it was unlikely to make the order in any event, since otherwise
there was a risk of such applications becoming dress rehearsals of the substantive
applications. I pause at this stage to rehearse what Dyson J said at page 353G concerning
the principle governing the exercise of discretion in cases involving public interest
challenges:
"I should start by explaining what I understand to be meant by a public
interest challenge. The essential characteristics of a public law challenge are that it raises
public law issues which are of general importance, where the applicant has no private
interest in the outcome of the case. It is obvious that many, indeed most judicial review
challenges, do not fall into the category of public interest challenges so defined. This is
because, even if they do raise issues of general importance, they are cases in which the
applicant is seeking to protect some private interest of his or her own."
(iii) Dealing with
the rationale behind the principle that a starting point was that costs were to follow the
event, Dyson J said at p. 355H et seq:
"I accept the submission of Mr Sales that what lies
behind the general rule that costs follow the event is the principle that it is an important
function of rules as to costs to encourage parties in a sensible approach to increasingly
expensive litigation. Where any claim is brought in court, costs have to be incurred on either
side against a background of greater or lesser degrees of risk as to the ultimate result. If it
transpires that the respondent has acted unlawfully, it is generally right that it should pay
the claimant's cost of establishing that. If it transpires that the claimant's claim is illfounded, it is generally right that it should pay the respondent's costs of having to respond.
This general rule promotes discipline within the litigation system, compelling the parties to
assess carefully for themselves the strength of any claim. The basic rule that costs follow the
event ensures that the assets of the successful party are not depleted by reason of having to
go to court to meet a claim by an unsuccessful party. This is as desirable in public law cases
as it is in private law cases. As Mr Sales points out, where an unsuccessful claim is brought
against a public body, it imposes costs on that body which have to be met out of the public
funds diverted from the funds available to fulfil its primary public functions."
(iv) Different
considerations about costs may arise after a full argument has been made when the court
may feel able to decide that public money should be spent on the clarification of a point of
law.
(v) It is appropriate to make a pre-emptive costs order only in exceptional
circumstances for the following reasons:(a) It will often not become clear whether an issue
is of sufficient public importance to justify departure from the basic rule that costs follow
the event until the hearing of the substantive application. In other words after the court has
seen all the material and heard all the arguments it will be in a better position to determine
that in most cases although obviously there will be exceptions.(b) It will rarely be possible
to make a sufficient assessment of the merits of the claim at the interlocutory stage. As
Dyson J said at page 357D, a fact that leave to move to apply for judicial review has been
granted is not enough. At 357D the judge said:
"Leave will often have been granted on
the papers, or following ex parte oral application. Even if the application is made at an inter
partes hearing the respondent may not at that stage place before the court all the material
or outline all the arguments that will eventually be considered by the court hearing the
12
substantive application. It may ultimately transpire that the application is hopeless."(c) The
court must also have regard to the financial resources of the applicant and respondent and
the amount of costs likely to be in issue. It 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 will be acting reasonably in so doing. These are
the principles on which I determined this case.
Conclusions
[7] I have come to the conclusion that I must reject the application by Mr Moore in this
case for the following reasons:
(i) I find no exceptional circumstances in this case. Planning applications of the
type under dispute are not uncommon and certainly are not exceptional.
(ii) I do not believe the facts of this case and the issues involved raise public law
issues which are of general importance. In essence this is a planning application
involving an area of 26 houses in Bangor and is essentially a local, albeit
important, issue for those concerned. I can see no basis upon which it raises a
public law issue of general importance.
(iii) The question of whether or not the PS have complied with the appropriate
procedural formalities with reference to acceptance of drawings, amendment of
drawings, and the issue of redevelopment are not of general public importance in
the context of this case. The allegations of public impropriety by the PS and the HE
are disputed and on the facts so far adduced before me are speculative and vague.
Certainly it is not possible for me to make a sufficient assessment of the merits at
this interlocutory stage.
(iv) I see no reason why the starting point for this case should not be that costs are
to follow the event. This is not the first judicial review arising out of this matter
and public money is clearly being incurred by the respondent in dealing with these
matters. The court should not lightly ignore the depletion of public funds save in
exceptional circumstances.
(v) I respectfully adopt the approach of Dyson J that it is necessary that the court
be satisfied by short argument in circumstances where it can have a sufficient
appreciation of the merits of the claim to conclude that it was in the public
interest to make the order. The allegations made by Mr Moore at this stage are
insufficiently based on evidence. They are strongly disputed by the d respondent
and most certainly do not amount to unchallenged acts of impropriety on the part
of the PS and the HE . Whilst his allegations may be of general interest, I do not
find them sufficiently evidence based or to raise public law issues which are of
such general importance as to merit the relief which he now seeks . I am unaware
as to what further evidence he could adduce but at this stage it is certainly not
possible to made a sufficient assessment of the merits of his claim to justify the
exceptional course of a pre-emptive costs order. In these circumstances the
question of the superior capacity of the respondent to bear the costs over the
applicant does not arise.
[8]
I therefore dismiss the application by Mr Moore.
34. Paragraphs 6 and 7 contain a statement by the Judge of the relevant law at
that time. The reasoning underlying the rejection of the application is
contained in the next paragraph, which ought to be paragraph 8 but is
erroneously numbered 7. Essentially the Judge, Gillen J, did not accept
that the case raised a public law issue of general importance.
13
35. The same year, an application for a PCO was made in the Court of Appeal.
In Lorraine McHugh Judicial Review [2007] NICA 26, a PCO was sought to
facilitate an appeal against a judgment of Kerr LCJ which dismissed a
challenge to a Health and Social Services Trust’s refusal to assist the
Appellant with the adaptation of her home given her health needs, in
circumstances where the decision was a result of the Trust applying a means
test pursuant to the Housing Renovation etc. Grants (Reduction of Grant)
Regulations (Northern Ireland) 1997.14 It was argued that the
Regulations were ultra vires the Housing (Northern Ireland) Order 1992;
that the means test contravened the Human Rights Act 1998; and, that
determination of the issues constituted a matter of general public importance
and was a matter of public interest.
36. Here is the judgment of the Court:
.
[1] This is an application by Lorraine McHugh (the appellant), for a protective costs order in
advance of the hearing of her appeal from a judgment of Kerr J (as he was then) in judicial
review proceedings. The appellant asks for an order that there be no order for costs between
the parties irrespective of the disposition of her appeal or for an order that there be no order
for costs against her irrespective of the outcome of the appeal.
[2] The appellant, who suffers from multiple sclerosis, applied for judicial review of a decision
of Home First Community Health and Social Services Trust (the Trust) not to make
arrangements to provide her with assistance for adaptation of her home. She asked for a
declaration that the Housing Renovation etc. Grants (Reduction of Grant) Regulations
(Northern Ireland) 1997 were ultra vires the Housing (Northern Ireland) Order 1992 and a
declaration that a means test, provided for in the regulations, was not compatible with Articles
3, 6 and 8 of the European Convention on Human Rights and Fundamental Freedoms and
Article 1 of the First Protocol to the Convention. The judge held that none of these grounds
had been made out and dismissed her application. [3] On 26 November 2004 the appellant gave notice of her intention to appeal against the
judgment. In the court below she had received legal aid under the Legal Aid, Advice and
Assistance (Northern Ireland) Order 1981. However, she found that she was ineligible for
legal aid in the Court of Appeal due to an improvement in her financial circumstances. This
improvement brought her, by what she describes as "a modest margin", above the threshold
for legal aid.
[4] In the affidavit grounding her application, the appellant explains that her funds do not
permit her to pay fees to counsel who are acting pro bono on the instructions of the Law
Centre (Northern Ireland) which does not make any charge. She states that she would be
unable to meet any order for costs made against her.
[5] The appellant asserts that while the appeal is very important to her the issues raised by it
will impact on vulnerable members of society in general. She adds that although she has been
advised that there is a real prospect that her appeal will succeed she will discontinue it if she
does not obtain a protective costs order.
[6] The financial disparity between the parties is
stressed by the appellant. The respondents declined an invitation from the appellant's
solicitors to agree to no order for costs being made irrespective of the outcome of the appeal.
The arguments
[7] Mr Larkin QC (who appeared with Mr Sayers for the appellant) referred to the general
principle, as expressed in Order 62 Rule 3(3), that if the court in the exercise of its discretion
sees fit to make any orders as to costs normally it must order that the costs are to follow the
event. [8] He drew attention to the overriding objective, stated in Rule 1A of the Rules of the
Supreme Court (Northern Ireland) 1980, which is designed to enable the court to deal with
cases justly. Rule IA (2) (a) explains that dealing with a case justly includes, so far as is
practicable, ensuring that the parties are on an equal footing. Rule I (A) (2) (c) (iv) makes it
clear that dealing with cases justly includes, as far as is practicable, doing so in ways which
are proportionate to the financial position of each party.
[9] Mr Larkin referred to Bolton Metropolitan District Council v Secretary of State for the
Environment (Practice Note) [1995] 1WLR 1176, 1178 where Lord Lloyd of Berwick
14
[2004] NIQB 91
14
said:
"As in all questions to do with costs, the fundamental rule is that there are no rules.
Costs are always in the discretion of the court, and a practice, however widespread and
longstanding, must never be allowed to harden into a rule." [10] He drew attention to the criteria drawn up by the Ontario Law Reform Commission in
1989 and referred to by Lord Phillips of Worth Matravers MR in R (Corner House) v Trade
and Industry Secretary [2005] 1WLR 2600 at para [42]. Counsel suggested that these might
be adopted by a court considering making a protective costs order. The criteria suggested by
the Commission were:
(i) the litigation must raise issues of importance beyond the
immediate interests of the parties.
(ii) the plaintiff must have no personal, proprietary or
pecuniary interest in the outcome, or if such an interest does exist, it clearly does not justify
the litigation economically.
(iii) the litigation does not present issues which have previously
been judicially determined against the same defendant.
(iv) the defendant must have a
clearly superior capacity to bear the costs of the proceedings.
[11] It was submitted on behalf of the appellant that while she has a personal interest in
the outcome of the proceedings, there exists also a clear public interest in the resolution of the
issues raised and clarification of the duties owed by public authorities under the framework of
legislation touching on Disabled Facilities Grants. Therefore the appellant met the governing
principles in R (Corner House) v Trade and Industry Secretary set out at para [17] of this
judgment.
[12] Mr Lavery QC, on behalf of the Trust, accepted that the court was empowered to make a
protective costs order. He emphasised that most of the cases in which protective costs orders
have been made were cases at first instance such as Corner House. Further, they were
normally cases involving matters such as planning where there is an obvious general public
interest in the outcome. In the present case the issues have been considered by a court which
has given a decision. Mr Lavery questioned how far it was necessary, in the general public
interest, to continue testing a decision which has been subject to judicial scrutiny. He
suggested that in such circumstances it was for the appellant to establish such an interest. He
submitted that the appellant does have a significant financial interest in these proceedings
though it is a matter for argument as to whether the amount involved would justify the expense
of engaging in litigation. In dealing with the question as to what was exceptional about the
proceedings Mr Lavery noted that the regulations are not novel having been in existence for
some time. If the basis of the appellant's case was that she had to move home, and in doing so
leave a house that had already been suitably adapted, few would be likely to be affected in this
way.
[13] The method used to assess how much an applicant for a grant should contribute was
to assess how much they could, with their income, raise by way of mortgage. Given the limited
resources available to the Trust it was argued that this was a fair method of means testing.
Furthermore it is not possible to say how many applicants have applied for these grants and
been turned down on this ground
[14] Mr Lavery referred to the judgment of the Court of
Appeal in R (Corner House) v Trade and Industry Secretary at para [75] as providing
examples of orders that have been made in other cases.
"A PCO can take a number of
different forms and the choice of the form of the order is an important aspect of the discretion
exercised by the judge. In the present judgment we have noted: (i) a case where the claimant's
lawyers were acting pro bono, and the effect of the PCO was to prescribe in advance that
there would be no order as to costs in the substantive proceedings whatever the outcome (R
Refugee Legal Centre) v Secretary of State for the Home Department [2004] EWCA Civ
1296); (ii) a case where the claimants were expecting to have their reasonable costs
reimbursed in full if they won, but sought an order capping (at £25,000) their maximum
liability for costs if they lost R (Campaign for Nuclear Disarmament) v Prime Minister [2002]
EWHC 2712 (Admin); (iii) a case similar to (ii) except that the claimants sought an order to
the effect that there would be no order as to costs if they lost ( R v Lord Chancellor, Ex p Child
Poverty Action Group [1999] 1 WLR 347; and (iv) the present case where the claimants are
bringing the proceedings with the benefit of a CFA, which is otherwise identical to (iii)." [15] Mr Maguire QC, who appeared for the Department for Social Development, made the
following submissions:
(i) despite the widening of the field in the last twenty years of those
who come within the description of an interest party in judicial review proceedings the
appellant would always have come within the description of someone having a direct interest
in these proceedings. (ii) protective costs orders represent a major development in judicial
review but do not benefit those who are pursuing a private interest. (iii) all developments
in the law begin from a baseline and this is identified as being where the applicant has no
private interest in the outcome. The seminal authority is R v Lord Chancellor, Ex p Child
Poverty Action Group where Dyson J said at page 353 the "essential characteristics of a
public law challenge are that it raises public law issues which are of general importance,
where the applicant has no private interest in the outcome of the case." This observation was
endorsed by the Court of Appeal in Corner House at para [73] of the judgment. (iv) this is
not an appeal which requires resolution in the public interest.
[16] In his reply Mr Larkin said that if the Corner House principles are followed with regard
15
to an absence of personal interest this will exclude Convention cases where the applicant has
to be "a victim "of a breach. He went on to suggest that the baseline should no longer be taken
from Ex p Child Action Poverty Group but from the overriding objective.
Conclusion
[17] It is only in exceptional circumstances that protective costs orders are made. The
principles in Ex p Child Poverty Action Group, as revised by the Court of Appeal in England
and Wales in Corner House, provide guidance as to when such circumstances may be said to
have arisen. They are found at para [74] and are as follows:
(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: (i) the issues raised are of general public importance;
(ii) the public interest requires that those issues should be resolved; (iii) the applicant has no
private interest in the outcome of the case; (iv) 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; and (v) if the order is not made the applicant will probably
discontinue the proceedings and will be acting reasonably in so doing. (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.
(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." We observe
that as these are guiding principles it does not follow, for example, that the fact that the
applicant has a personal interest in the proceedings means that this must invariably amount to
a complete bar to making a protective costs order.
[18] The appellant comes within some of the guiding principles as she has secured pro bono
representation and has indicated that if she does not achieve a protective costs order she will
not pursue her appeal. Principles (i) (ii) and (iii) present her with greater difficulty. Because
of her medical condition she needs to have work carried out to her home and this gives her a
significant interest in the outcome of the proceedings. In an article entitled Protective Costs
Orders by Stein and Beagent [2005] JR the authors indicate that at one end of the spectrum is
the public law case where the individual claimant seeking the order is the only person to
benefit from the litigation. The boundaries, they suggest, may be more blurred where a
claimant is bringing a claim which, if successful, will lead to direct personal benefit to the
claimant but the issues raised are of real public importance. If such an approach is adopted
this is not a case which comes within the boundary despite any personal interest of the
appellant by reason of issues of real public importance. A statement that the issues will impact
on vulnerable members of society is insufficient to provide the basis for the private interest of
the appellant in the outcome to be disregarded as being incidental to an issue of general
public interest. [19] Protective costs orders were made in R(CND) v Prime Minister where the issue was the
legality of the war in Iraq and in R (Refugee Legal Centre) v Secretary of State for the Home
Department [2004] EWCA Civ 1296, where the issue was the fairness of arrangements for
processing asylum- seekers' claims. These two examples illustrate the type of case where such
an order is appropriate. The Child Poverty Action Group wished to challenge the way in
which the Lord Chancellor exercised his statutory power in relation to the extension of legal
aid to cover at least some cases before social security tribunals and commissioners and it was
decided that such an order was not appropriate. Although that decision was given prior to the
overriding objective being included in the rules we agree with Richards J. in R v
Hammersmith and Fulham BC Ex p Council for the Protection of Rural England [2000] Env
LR 544 where he said that the relevant aspects of the rule are embedded in the principles
stated in Child Poverty Action Group. This latter case provides an example that is much
nearer to the present case than those mentioned earlier where a costs protection order was
made.
[20] In the result we are not satisfied that the issues raised in this appeal are of general public
importance or that the appellant has no private interest in the proceedings. This is not
therefore one of those exceptional cases where it is appropriate to make a protective costs
order and the application must be dismissed.
37. In dismissing the application, the Court held that (a) the issues were not
of general public importance, (b) the appellant had a private interest in
the proceedings and (c) it was not an exceptional case.
38. Central to the reasoning of the Court was the principle that PCOs are
made only in exceptional cases.(See Paragraph 17, sentence one) That
part of the reasoning is no longer good law – there is no exceptionality
16
threshold.15
39. The reasoning underpinning the Court’s holding that the case did not
raise an issue of public importance is somewhat opaque and not readily
ascertainable from the face of the judgment. Whether the Court was
correct to find that the case raised no issue of general public importance
or public interest appears questionable, particularly as the Judge below
(Kerr LCJ as he then was) wrestled somewhat with the ultra vires
challenge and the outcome impacted a sizable catchment of vulnerable
people.16
40. There was a different outcome on this issue in the following three
cases:
a. Ciara Patricia Thompson [2010] NIQB 38
b. The Alternative A5 Alliance’s Application [2012] NIQB 97
c. JMCA Re Judicial Review [2013]
Thompson
41. In Ciara Patricia Thompson [2010] NIQB 38, the Lord Chief Justice
considered an application for a PCO in respect of a judicial review
challenge to planning permission for a proposed housing scheme in
Bryansford Village. The Applicant was a supporter of the Tullymore
Community Forum which formed part of a wider Forum – the
Newcastle Sustainable Community Planning Forum. Whilst eligible for
legal aid, it was refused because she was part of a group of numerous
persons who were in a financial position to pay for the litigation.
42. The judgment of the Court is set out below:
History of the application
[1] On 4 November 2008 the applicant was granted leave to apply for judicial review of a
planning permission granted for a housing scheme at lands at 45 Bryansford Village.
This ruling deals with a further application made on 4 February 2009 whereby the
applicant seeks a protective course order so that she shall not bear the respondent's costs
in these proceedings in any event.
[2] The applicant resides at a housing development in Bryansford very close to the
proposed development. She is a supporter of the Tullymore Community Association which
supported local residents in objecting to the planning application giving rise to the
impugned permission. The Tullymore Community Forum is a member of the Newcastle
Sustainable Community Planning Forum which is an umbrella grouping of community
groups and other bodies. Bryansford is within the area covered by this group. [3] The applicant applied for legal aid in order to fund these proceedings. She has a low
income and is financially eligible for legal aid and this was a factor in the decision that
she was the one who ought to bring these proceedings. Her application for legal aid
funding was refused on the basis of Regulation 5 (11) of the Legal Aid General
Regulations (Northern Ireland) 1965 which provides that where an application is made
by or on behalf of a person in connection with a cause or matter in which numerous
persons have the same interest the appropriate committee shall refuse the application if
they are satisfied that it would be reasonable and proper for the other persons having the
same interest in matter as the applicant to defray so much of the costs as would be
payable from the fund in respect of the proceedings if a certificate were issued. This
15
16
See Thompson at paragraph 10, below.
Supra note 13 at paragraphs 35-37.
17
decision was appealed to the Appeal Committee of the Legal Services Commission but the
appeal was unsuccessful.
The grounds of the application
[4] The challenge to the planning permission was made on four grounds. The first is that
the proposal was not referred to the Planning Service Management Board as requested
by the District Council. Planning Service operates a procedure whereby District Councils
can refer to the Planning Service Management Board developments which they want to
see reconsidered. In a response dated 26 May 2009 to the pre-action protocol letter the
respondent refers to the guidance on the operation of this mechanism which indicates
that the proposal must relate to a significant development. In this case the proposal is for
the construction of 23 dwelling units within the development limit of Bryansford. The
referral letter from Down District Council identified that there were 90 objections to the
proposal and that the scale of the development would fundamentally change the
character of the conservation village. The issue, therefore, is whether the respondent's
approach to the identification of what is significant is unlawful.
[5] The second ground of challenge relates to the applicant's contention that the
proposal is not in conformity with certain identified elements of the Draft Ards and Down
Area Plan 2015 and PPS 6: Planning, Archaeology and the Built Heritage. Planning
Service contends that these policies were taken into account and that their application is
a matter of professional judgment. A reduction in the number of dwellings was required
in order to honour these policies. The applicant contends that the approach to the
policies is Wednesbury unreasonable.
[6] The third ground of challenge is that the consultation response by EHS (Protecting
Historic Buildings) was improperly amended having regard to budgetary considerations.
It is common case that EHS indicated their opposition to the original scheme. The
respondent contends that in answer to the amended scheme EHS indicated that they had
no objection in principle. This will clearly be a matter for analysis of the replying
affidavits and other materials at the trial.
[7] The fourth ground of challenge concerns the impact of the development on the local
sewerage system. In the initial response from the Water Management Unit on 10
February 2006 it was recommended that the developer provide temporary treatment for
the waste water from the site until the system is upgraded. On 19 October 2006 Water
Service confirmed no objection to the proposal and indicated that funding was available
for foul and storm water sewers. On 14 November 2006 Water Management Unit
recommended that the developer provide a temporary treatment works but on 23 July
2007 a further e-mail was received by Planning Service indicating that Water
Management Unit was content to accept the connection of the foul sewer to the Northern
Ireland water main system and that accordingly a temporary treatment works would not
be required. On 12 September 2007 a further e-mail was received by Planning Service
from Northern Ireland Water confirming that it would be refusing foul sewer
connections for future planning applications affected by capacity problems.
[8] The applicant contends that the decision to grant permission without a legally
enforceable condition in relation to treatment of waste water is contrary to Directive
76/160/EC and Directive 2006/7/EC and the relevant domestic regulations in relation to
bathing water and urban waste water treatment. The applicant points to material
demonstrating that the local bathing waters have been subject to excessive spillage as a
result of the existing infrastructure and contends that to include the need for a private
wastewater treatment facility as an unenforceable informative is contrary to both
community law and domestic law.
The relevant caselaw
[9] The circumstances which a party should be entitled to a protective costs order has
been subject of recent jurisprudence both in this jurisdiction and the Court Of Appeal in
England. Some of that jurisprudence has been influenced by the provisions of Article 9 of
the Aarhus Convention17 which provides that procedures for access to justice in relation
to the contravention of national law relating to the environment shall be fair, equitable,
timely and not prohibitively expensive although the case law makes clear that the
principles applicable to public interest litigation should be the same whether or not the
issue relates to the environment. The leading case is R (Corner House Research) v
Secretary Of State for Trade and Industry [2005] EWCA Civ 192. The court reviewed
17 The UNECE (United National Economic Commission for Europe) Convention on Access to Information,
Public Participation in Decision-Making and Access to Justice in Environmental Matters. The European
Commission has been a party to the Convention since May 2005. For further information go to http://ec.europa.eu/environment/aarhus/.
18
guidance which had been put forward by Dyson J in R v Lord Chancellor ex p CPAG [1999]
1 WLR 347 and set out governing principles in paragraph 74.
"74 We would therefore
restate the governing principles in these terms.
(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: (i) the issues raised are of general public importance; (ii)
the public interest requires that those issues should be resolved; (iii) the applicant has no
private interest in the outcome of the case; (iv) 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; and (v) if the order is not made the
applicant will probably discontinue the proceedings and will be acting reasonably in so
doing.
(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.
(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."
[10] This guidance was subsequently reviewed and largely endorsed in this jurisdiction in
Re McHugh's Application [2007] NICA 26. The court noted, however, that the fact that an
applicant had a personal interest in proceedings did not invariably amount to a complete
bar to the making of a protective costs order. In this case the court endorsed the
exceptionality test. In R (Compton) v Wilshire Primary Care Trust [2008] EWCA Civ 749
the court indicated that this test was simply a consequence of the application of the
relevant principles rather than a freestanding further hurdle. The application of the principles
[11] The first question is whether the issues raised are of general public importance. I can
deal briefly with the issues under the Draft Ards and Down Area Plan 2015 and PPS 6. In my
view the issues raised in relation to these matters are essentially matters of interpretation
of well-known planning policies and I consider that there is no issue of general public
importance arising in respect of them. I consider that the same is true in relation to the
complaints about the approach of the EHS. It appears that this may well turn out to be a
fact specific matter but in any event I do not consider that it raises any question of general
public importance.
[12] The issue of compliance with the bathing water regulatory regime has clearly been a
matter of some concern and interest within the general Newcastle area. On one view this is
a dispute about whether this permission if implemented would or would not adversely
contribute to difficulty in complying with the relevant European and domestic regime. If
that were the sole issue I do not consider that it would constitute a matter of general public
importance even bearing in mind the broad purposive interpretation that should be applied
to this concept and the locality to which it relates. There is, however, a separate issue raised
in relation to the extent to which Planning Service has an independent obligation to take
into account the relevant regulatory regime. In most instances Planning Service will not
have the expertise to go behind recommendations made by expert consultees. The papers
suggest, however, that the position of Water Management Unit may have modified during
the period between their last consultation and the date on which permission was granted.
The issue then becomes whether it was reasonable for Planning Service to rely on a
consultation dated 23 July 2007 for the grant of the permission on 1 August 2008 when
Planning Service had subsequently received an e-mail dated 12 September 2007 confirming
that Northern Ireland Water would be refusing foul sewer connections for future planning
applications affected by capacity problems.
[13] The cases make clear that issues of general public importance and the need that they
should be resolved in the public interest should be examined flexibly in the application of
this jurisprudence. I consider that this case falls on the borderline and that it is appropriate
for me to consider making some order in relation to it. Insofar as reference to the Planning
Service Management Board is concerned this appears to be a matter of the evaluation of
significance and it does not seem to me that it passes the public interest test set out as the
first two conditions in paragraph 74.
[14] The applicant clearly has a private interest in the outcome of this case but in light of
the observations of the Court Of Appeal in McHugh I do not consider that this should
markedly weigh against her. Although the applicant is a person of limited means it is clear
that she is supported by a wider community. The extent of that support and the
circumstances of those involved have not been disclosed. The evidence before me indicates,
however, that exposure to unlimited costs would make it inevitable that the applicant could
not proceed. This is not a case where the applicant's representatives are acting pro bono
although it is said that they are not charging commercial rates. [15] The substantive hearing of this application should not take more than one day. For the
reasons that I have given I consider that there is one issue of general public importance in
the locality in which the applicant resides and that the public interest requires that the
issue should be resolved. I consider that what is fair and just is recognised by me making an
19
order that any award of costs against the applicant in respect of the hearing at first
instance should not exceed £10,000. (My emphasis.)
43. The Court considered that the issue as to whether the Planning Service
had acted with sufficient rigour in taking the relevant regulatory regime
into account, particularly given the change in stance by NI Water during
the relevant period, was a matter of public interest. However, the
Court considered it a borderline case, which may have had some impact
on the level of protection afforded.
Alternative A5 Alliance
44. In The Alternative A5 Alliance’s Application [2012] NIQB 97, Horner J
granted the application for a PCO. In this case there was no real dispute
as to the appropriateness of a PCO, the issue to be decided was the
nature of the Order, and specifically the costs cap: the amount of costs
for which the Applicants could be liable. It was an Aarhus Convention
case, but pre-dated the rulings of the ECUJ and the Supreme Court in
Edwards. The Court found as follows:
[1] The Alternative A5 Alliance has brought what is in effect a statutory judicial review of
the proposed 85 kilometre A5 western transport corridor being built because, inter alia,
they claim the Department has breached their EU rights in general and the EIA Directive in
particular. The Alliance claims that the requirements of Article 9 of the Aarhus Convention
which had been incorporated originally in Article 10A now Article 11 of the EIA Directive
2011/92/EU are directly engaged. [2] The Alliance seeks a Protective Costs Order ("PCO") of £5,000. The Department of
Regional Development ("DRD") object not to the order but to the amount and suggest
£50,000. They also seek a cap on the costs which would be recoverable by them should the
Alliance succeed in the sum of £30,000. The Alliance resists this and point out that the costs
which they can recover are limited in any event because their legal team is working at
discounted commercial rates. [3] First of all, I want to commend the industry of counsel. I have had the benefit of two very
detailed skeleton arguments and of being referred to all the relevant case law, both in UK
and Europe and also to the relevant legislation. I want to make it clear that although I do
not deal specifically with every authority to which I have been referred, I have taken them
all into account. In particular I found considerable assistance from two sources. The first
was the decision of the Lord Chief Justice in the decision of re Ciara Thompson 2010 NIQB
38 and the second the opinion of the Advocate General Kokott in the referral by the
Supreme Court in Edwards v Environment Agency 2011 (1WLR 79). It was common case
that the date for the decision of the ECJ was unknown. It might be a matter of weeks or a
matter of months. The opinion of the Advocate General given on 18 October 2012 is only
advisory and does not bind the court. However, I do consider her reasoning to be persuasive.
She said at paragraph 49:
"… account must be taken of the objective and subjective
circumstances of the case, with the aim of enabling wide access to justice. The insufficient
financial capacity of the claimant may not constitute an obstacle to proceedings. It is
necessary always, hence including when determining the costs which can be expected of
claimants having capacity to pay (sic), to take due account of the public interest in
environmental protection in the case at issue."
[4] Looking at the arguments presented on behalf of the Alliance and on behalf of the
Department respectively, it does rather seem as if I have been asked to choose for the PCO
an arbitrary figure of £5,000, a sum which it is not suggested bears any relation to the
means or circumstances of the Alliance. The Alliance's Senior Counsel assured me that this
was a standard sum awarded in respect of PCOs in England and I have no reason to doubt
this. On the other hand, Senior Counsel for the Department said that in hearing such an
application, I should carry out a balancing exercise and take into consideration the
circumstances of this particular case in determining what is the appropriate amount to
award. Having had time to consider the matter and read all the authorities, I am of the view
that the proper approach is for me to carry out the more nuanced exercise suggested by
Mr Elvin QC on behalf of the DRD. This will ensure that the procedure is "fair, equitable,
timely and most importantly not prohibitively expensive". It is my view that "prohibitively
20
expensive" can only be construed in relevant terms. What may be prohibitively expensive to
one person who is in receipt of the minimum wage will not be so to another person who
earns a six figure salary. I also consider that account should be taken of the difference
between someone who brings an application such as Mr Garner in R (Garner) v Elmbridge
BC (2011) Env LR 10 for entirely altruistic reasons and in the public interest and someone
who is motivated primarily by private interest, although the application may have the
necessary public interest dimension. Also the approach to Government departments funded
by the taxpayer will be necessarily different to commercial organisations dependant on
private finance and individuals who have to rely on their own resources. [5] Accordingly in this count I have taken into account the following matters in particular:-
(i) The public interest of this challenge, namely to protect the environment.
(ii) The private interests of those members involved on behalf of the Alliance. (iii) The means of those members of the Alliance which are set out in the letter of
27 November 2012 and the means of their supporters which have also been
provided to the court in a separate document.
(iv) The importance of ensuring that the Alliance has access to justice.
(v) The fact that the Department is funded by the taxpayer.
[6] I have not taken into account the merits as it is not possible for me to form a view other
than to say that the Alliance's case is not obviously going to fail. In those circumstances, I
propose to make a PCO and cap the costs liability of the Alliance at £20,000. Given that
there are approximately 135 persons involved with the Alliance, this works out at just over
£150 per person. I do not consider that this is "prohibitively expensive" even when taking
into account the contribution that each of the members of the Alliance must make to the
Alliance's own costs. I am of the view that this meets the requirements of the Aarhus
Convention. I do not propose to make any cap on the costs which may be recoverable from
the Department should the Alliance succeed. As I have said, those costs are already, to some
extent, capped and I consider it is the fair way to deal with the matter as it takes into
account the merits of the claim. In other words, should the Alliance succeed, those involved
will not be out of pocket. It seems to me that this achieves a fair and equitable balance. If
the Alliance loses, the costs it will pay are capped at £20,000. If it succeeds, its costs will
almost certainly be paid in full because in these types of cases costs almost always follow
the event.
45. The Courts reasoning appears correct in law and indeed prescient given
the subsequent decisions of the ECUJ and the Supreme Court in the
Edwards litigation as outlined above.
JMCA
46. JMCA concerned a person with a mental disability living in hostel
accommodation and subject to guardianship under the Mental Health
Order (NI) 1986. He sought to challenge the terms under which his
guardian (the Belfast Health and Social Care Trust) was restricting /
depriving him of his liberty. It was established by the Court that the
Applicant had mental capacity. At the time of the Leave application his
level of financial capital made him ineligible for legal aid.
47. The case involved a matter of public interest, i.e. whether the Trust had
lawful authority to restrict (and/or deprive) the Applicant of his liberty
given their reliance upon Guardianship under Part II of the Mental
Health Order (NI) 1986. Treacy J had previously given leave on the
same issue in a different case.18
48. PILS played an important role in the application for the PCO in this case.
It offered to pay the stamp fee (£200) and to pay for any costs liability
arising in respect of the PCO application. It is also notable that Solicitor
18
JR50 Re Application for Judicial Review [2011] NIQB 43 (12 May 2011)
21
and Counsel acted pro bono at the Leave stage and in relation to the PCO
application.
49. It was accepted that the Applicant could conceivably have a private
interest in the outcome in terms of less restrictive living and possible
compensation, but it was argued that this should not prevent him
enjoying the benefit of a PCO.19
50. Treacy J made a PCO in the following terms:
a. If the Applicant was unsuccessful, he would be liable to pay the
Respondent’s costs up to £2000 plus VAT; and,
b. If the Respondent was unsuccessful, it would be liable to pay the
Applicant’s costs up to £10000 plus VAT.
51. The nature of the Order reflected the merit of the application.
52. Treacy J dismissed the judicial review challenge.20
53. When it came to the appeal, the Appellant was eligible for legal aid
subject to a contribution. PILS stood over the not insignificant
contribution to facilitate the appeal.
54. At the start of the hearing in the Court of Appeal the Respondent
acknowledged the power of guardianship under the Mental Health
Order (NI) 1986 did not confer authority on a guardian (i.e. the
Respondent Trust) to abrogate the Appellant’s liberty to the extent that
it had. Consequently the appeal was dismissed on Salem grounds with
costs to the Appellant above and below.21 The Court issued a short
judgment to clarify the legal position.
Conclusions
55. PCOs have an important role to play in public interest litigation in
Northern Ireland. (The recently enacted Costs Protection (Aarhus
Convention) Regulations (Northern Ireland) 2013 will have a significant
impact on those environmental challenges caught by the Regulations.22)
Since Thompson, the case law demonstrates a judicial preparedness,
where appropriate, to make a PCO in measured terms commensurate
with the circumstances. Hopefully such a proportionate approach will
continue to characterise the jurisprudence in Northern Ireland.
Michael Potter
Bar Library, Belfast;
19
See Thompson above, at paragraph 14; also McHugh at paragraph 17.
20 JMCA Re Judicial Review [2013] NIQB 77 (18 July 2013)
21 JMCA v The Belfast Health and Social Care Trust [2014] NICA 37 (12 May 2014)
22
For example they apply in the Casement Park challenge currently before the Honourable Court.
22
Cloisters, London.23
Can I acknowledge the assistance of Gordon Anthony (QUB), David Scoffield QC (Bar Library), Sean
McParland (Law Centre NI) and the Chief Executive of the Bar Council in the preparation of this paper. I,
however, am responsible for any errors contained herein.
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