Legal Aid, Sentencing and Punishment of Offenders Bill

Memorandum submitted by Hugh James Solicitors (LA 91)

1. Summary

1.1. Hugh James is a Cardiff law firm with a specialism in private environmental litigation i.e. cases brought by private individuals in relation to environmental blight.

1.2. We wish to help inform the Committee debate as to the proposed reforms concerning the funding of civil litigation that affect these cases.

1.3. We are principally concerned with proposals relating to the non-recoverability of success fees and ATE premiums and the related partial implementation of Lord Justice Jackson’s recommendations to introduce ‘Qualified One-way Costs Shifting’ (‘QOCS’).

1.4. In our view the combined effect of these proposals will result in such a significant barrier to access to justice in private environmental litigation that all but extremely wealthy Claimants will not be able to bring cases due to prohibitive cost and the UK will thus be in breach of the third limb of the Aarhus Convention.

1.5. We propose alternative amendments to the Bill to maintain access to justice in these important cases that also recognises the need for reform generally and accords with the overall objectives of the Bill. A copy of the proposed amendments is at Appendix 1.

2. Our expertise

2.1. Over the last 15 years we have developed a particular expertise in representing local communities across the UK affected by various forms of environmental blight caused by industrial operations.

2.2. We have dealt with over 40 cases representing over 5000 households. At Appendix 2 we have set out summaries of some of the cases that we have dealt with.

2.3. The cases are often brought under the umbrella of a Group Litigation Order as provided for in Part 19 of the Civil Procedure Rules.

2.4. Cases are generally brought in private nuisance often involving allegations of negligence with claimants seeking damages for loss of enjoyment of property and injunctions to prevent future ongoing blight.

3. Essential features of Private Environmental Litigation

3.1. Cases generally involve the blighting of a local community by the industrial or commercial operations of a corporate body, usually a limited company, unchecked by the actions of the regulator.

3.2. It is rare for these types of cases to arise in affluent areas and typically claimants are working class residents with below average means.

3.3. In many cases claims are brought as a last resort, as residents will have made complaints and sought the assistance of the relevant regulator to no avail.

3.4. The Defendant may have been prosecuted for offences e.g. under the Environmental Protection Act 1990 but always for isolated incidents which the regulator can be confident about proving.

3.5. Even where enforcement action has been taken it is very rarely effective in resolving the nuisance being suffered by residents and never provides compensation for those affected.

3.6. Defendants are generally concerned to protect their profitable business and concerned about reputational issues. They therefore tend to be very well resourced and often represented by large London based solicitors and specialist leading Counsel.

3.7. Claimants are often faced with a ‘David v Goliath’ type scenario with the Defendants able to considerably outspend them. Claimants will often seek cost capping orders usually to ensure that they can be confident that their cost risk is adequately insured.

3.8. Cases are often hard fought and complex involving arguments about permit compliance, reasonable user and the nature and character of the areas concerned. Expert evidence is a commonly required in relation to these issues as well as to model the impact of blight.

3.9. The cases place significant financial strain on solicitors acting on CFAs in terms of cash flow and the funding of disbursements.

3.10. Costs are commonly disproportionate to the amount of compensation awarded mainly because of the low level of damages in such cases, e.g. £1,000 p.a. in Barr & others v Biffa Waste Services Limited [2011] EWHC 1003 (TCC) for odour nuisance from a landfill site. The approach of the Defendant’s solicitors in relation to procedural issues having regard to paragraph 3.6 above is also a significant factor that often affects the Claimants’ costs.

4. Funding of cases

4.1. Since the implementation of the Access to Justice Act 1999 and the demise of legal aid these cases have been funded under Conditional Fee Agreements in essentially the same way as personal injury actions are routinely funded. Initially ATE was difficult to find but it is now available from a small number of insurers.

4.2. Contrary to popular belief ‘Before the Event insurance’ (‘BTE’) is almost never available in these cases due to various policy restrictions and exclusions. In relation to the cases that we have handled to date BTE has only been available to 0.85% of the households concerned..

5. Importance of environmental cases

5.1. Ensuring access to justice in these cases is important for a number of reasons: -

5.1.1. Private residents, usually in down-trodden areas, are able to enforce their long established common law legal rights to protect their home life and environment against a corporate Defendant.

5.1.2. The majority of our cases have settled under terms of confidentiality that provide for compensation for residents and detailed agreements with Defendants which have resulted in works to abatement the blight/s of which the claimants complain. They are therefore truly effective in helping people protect their environment.

5.1.3. They help relieve hard-pressed regulators who are commonly unable or unwilling to take action in such cases.

5.1.4. They enable Claimants to enforce their Human Rights as enshrined in the European Convention of Human Rights, typically Article 6 (right to a fair trial), Article 1 of the First Protocol (the right to peaceful enjoyment of possessions and property) and Article 8 (the right to respect for private home and family life).

5.1.5. They give rise to important points of general public importance, see for example the Order of Lord Justice Aikens dated 30th June 2011 in Barr & others v Biffa Services Limited set out at Appendix 3 and the Court of Appeal in Dobson & others v Thames Water [2007] EWHC (TCC) [2008] Env LR 21, and [2009] EWCA Civ 28 [2009] HRLR 19.

5.2. Further, the fact that cases are successfully handled on CFAs is evidence that at present the requirements of the third pillar of the Aarhus Convention are met i.e. ensuring that the public have the right to recourse to procedures in cases where a party violates or fails to adhere to environmental or convention principles without prohibitive cost. The United Nations Economic Commission for Europe via the Aarhus Convention (to which the UK is a signatory) can commence proceedings against the UK in the ECJ, and has previously found the UK non-complaint with the Convention.

6. The Affect of the proposed reforms

6.1. If the proposed reforms relating to the funding of civil litigation under clauses 41-42 of the Bill are implemented i.e. the non recovery of success fees and ATE premiums residents will be unable to bring cases of this nature as the cost of doing so will become prohibitively expensive.

6.2. Claimants in these cases are often of low or at best average means. If faced with the prospect of running the risk of adverse costs in a case against a limited company or having to meet a substantial ATE premium only the very wealthy are likely to be able to proceed.

6.3. The primary objective of these cases is to secure an abatement of blight. Damages in nuisance cases are at such a level that even if Claimants bring cases as part of a group action they can generally never expect to be in a position to meet even a fraction of the cost of an ATE policy from damages let alone any success fee that might be payable to their solicitor.

6.4. The proposed reforms would therefore mean that Claimants would be unable to enforce their long established legal rights, there would be additional pressures on regulators; Claimants would be unable to enforce their Human Rights, as set about above; and accordingly the UK would be in breach of Aarhus.

7. Proposals

7.1. We recognise that the cost of civil litigation in England and Wales is an issue where reform in certain areas is essential.

7.2. In general terms the proposed reforms seek to ensure that Claimants can still access justice in particular types of cases by addressing key issues that effect those case types e.g. preserving ATE for clinical negligence and introducing QOCS in personal injury cases.

7.3. There has however been no consideration of environmental cases (other than to incorrectly assume that BTE is generally available).

7.4. We are aware that a number of representations have been made to exclude certain categories of case from the proposed changes to recoverability of success fees and ATE premiums.

7.5. An exclusion would clearly be warranted in relation to environmental cases as there is no reason in principle to treat Claimants in these cases less favourably than foreign nationals pursuing toxic tort cases, or claimants seeking damages for whiplash or other personal injury. There are in fact important policy reasons to ensure access to justice in this area and to ensure compliance with Aarhus.

7.6. If such exclusions do not find favour it is however essential that any reform ensures that access to justice remains possible in environmental cases.

7.7. We therefore propose alternative amendments that seek to preserve access to justice in this important area of law. Both amendments define environmental cases by reference to the definition found in the Aarhus Convention and would exclude claims by a business carried on for profit. The benefit would thus be limited to private individuals/charitable NGOs.

7.8. The draft amendments appear at Appendix 1. The first amendment is to Part 2 and would exclude environmental cases from the provisions of clauses 41 and 42 and thereby preserve the entitlement to recover success fees and ATE premiums. This would provide continuing access to justice in this area as originally intended by the CFA legislation.

7.9. In the alternative we propose the introduction of a new rule to introduce QOCS in environmental cases. The objectives of the clause are twofold:

7.9.1.1. to limit the exposure of a claimant in respect of adverse costs save where two conditions are satisfied, namely that the claimant has conducted the litigation in an unreasonable manner, and the amount is such that it is reasonable to order him to pay;

7.9.1.2. in a case where the court is satisfied that interim relief pending trial, such as an interim stay/injunction, should be granted, to ensure that this relief will be granted without the (prohibitive) pre-requisite that the claimant has to agree that he will if the court so orders indemnify the defendant in respect of all the financial consequences of such interim restraint.

7.10. The "includes a claim" formulation in subs. (1) reflects the drafting of the Bill itself – see the definition of "clinical negligence proceedings" in Clause 43(1) (new s. 43(5) Court and Legal Services Act 1990). The wording of interim relief is borrowed from s.12 of the Human Rights Act.

7.11. The proposed amendments would therefore ensure access to justice but would not run contrary to the objectives of the bill or the recommendations put forward by Lord Justice Jackson. In particular, he recommended that the use of QOCS would be an appropriate policy objective if the result would otherwise be a breach of the Aarhus Convention.

September 2011

Appendix 1

LEGAL AID, SENTENCING AND PUNISHMENT OF OFFENDERS BILL – COMMONS

Hugh James draft amendments to Part 2: Environmental claims

Either

Amendment

(1) Environmental Cases

Page 29, line 21 [Clause 41], at the end insert-

( ) The amendments made by subsection (2) and (4) do not apply in relation to proceedings which include a claim by which a person ("the claimant") seeks any remedy or relief in respect of an act , omission or decision relating to the environment provided that the proceedings do not relate to a business which the claimant carries on for profit.

( ) For the purposes of this section, an act, omission or decision relates to the environment if information about it would be environmental information within the meaning of Article 2(3) of the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters done at Aarhus, Denmark on 25 June 1998.

Or: -

(1) Draft New Clause

To move the following Clause-

`Environmental cases

Costs and financial undertakings in environmental cases

(1) Subsections (3) and (4) apply to proceedings which include a claim by which a person ("the claimant") seeks any remedy or relief in respect of an act, omission or decision relating to the environment.

(2) But those subsections do not apply where the proceedings relate to a business which the claimant carries on for profit.

(3) The court must not order the claimant to make a payment in respect of costs incurred by any other party to the proceedings unless-

(a) those costs were incurred as a result of the claimant’s unreasonable conduct, and

(b) the amount of the payment does not exceed such amount (if any) as it is reasonable for the claimant to pay.  

(4) A claimant who seeks relief before trial or hearing of the claim need not give an undertaking as to damages as a condition of the grant of that relief.

(5) For the purposes of this section, an act, omission or decision relates to the environment if information about it would be environmental information within the meaning of Article 2(3) of the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters done at Aarhus, Denmark on 25 June 1998.

Note - Article 2(3) refers to :-

(a)             The state of elements of the environment, such as air and atmosphere, water, soil, land, landscape and natural sites, biological diversity and its components, including genetically modified organisms, and the interaction among these elements;

(b)             Factors, such as substances, energy, noise and radiation, and activities or measures, including administrative measures, environmental agreements, policies, legislation, plans and programmes, affecting or likely to affect the elements of the environment within the scope of subparagraph (a) above, and cost-benefit and other economic analyses and assumptions used in environmental decision-making;

(c)              The state of human health and safety, conditions of human life, cultural sites and built structures, inasmuch as they are or may be affected by the state of the elements of the environment or, through these elements, by the factors, activities or measures referred to in subparagraph (b) above;

Appendix 2

Section A

Cases not covered by Confidentially Agreements

 

Eileen Anthony & others v The Coal Authority [2005] EWHC 1654 (QB) - Judgment for claimants and indemnity costs award – claim in nuisance for blight caused by sulphurous fumes from a burning coal spoil tip formally owned by the defendant.

 

Dobson & others v Thames Water Utilities Limited - Group Litigation Order No.52 [2005] Mogden Group Litigation - 1335 - claim by over 1000 residents for nuisance caused by odour and mosquitoes from the Mogden Sewage Treatment Works. The full trial concluded in May 2010 and Judgment is awaited.

Dobson v Thames Water Utilities Ltd [2007] EWHC 2021

Judgment on preliminary issues including whether the 'Marcic' defence applied to claims in negligence relating to the operation of the Mogden sewage treatment works.

 

Dobson v Thames Water Utilities Ltd [2009] EWCA Civ 28

Principles for considering award of damages to occupiers and to other residents of same household - Human Rights Act 1998, s 8, Sch 1, Pt I, art 8.

Thomas & Others –v- Bridgend County Borough Council [2011] EWCA Civ 862

Interpretation of section 19(3) of the Land Compensation Act 1973

Judgment for the claimants declaring that the three year proviso under section 19(3) of the Land Compensation Act 1973 was incompatible with the claimants’ convention rights under Article 1 of Protocol 1. Ruling that the subsection should be interpreted under section 3 of the Human Rights Act 1998 so as to be compatible with the claimants convention rights so that the claims for compensation for nuisance effects of a new road could proceed. 

 Hobart & Others -v- Manchester Airport- LCA/485 - 605/2007 & LCA2 - 265/2008

Claim for damages for property depreciation by 325 Claimants relating to the second runway at Manchester Airport.

Barr & Others v Biffa Waste Services Limited [2011] EWHC 1003 (TCC)

Westmill Landfill Group Litigation

Over 150 claimants seeking damages for loss of amenity for odour nuisance allegedly caused by the Defendant's landfill site near Ware, Hertfordshire. Judgment for the Defendant at first instance on the basis that there can be no liability in nuisance without negligence or default in the management or operation of the site. Defendant failed on the basis that the existence of an environmental permit constituted statutory authority and thus were immune from a common law nuisance claim. The Claimants have appealed and the Defendant has cross-appealed. The case will be heard by the Court of Appeal in January 2012.

Anslow & Others v Norton Aluminium Limited (Claim No: 0BM90055)

Norton Aluminium Group Litigation

Over 130 claimants seeking damages for loss of amenity for odour, noise and dust nuisance allegedly caused by the Defendant's castings foundry in Norton Canes, Cannock. Trial adjourned in July 2011 and currently listed to reconvene in May 2012.

Parkin & Others v Alba Proteins (Penrith) Limited (Claim No: 0CA90012)

Wildriggs Rendering Site Group Litigation

Claimants seeking damages for loss of amenity for odour nuisance allegedly caused by the Defendant’s animal rendering site in Penrith, Cumbria. Group Litigation Order allows for a cut-off date at the end of September 2011. The trial is expected to be listed at the next case management conference.

 

Section B

Cases covered by Confidentiality

1. June Bacon & others v 3C Waste [Nantygwyddon Group Litigation GLO No.13 2001] – brought in 2003 by over 200 residents in relation to nuisance and personal injury relating to a landfill site in Gelli, Rhondda – settled at mediation

2. Newton Longville Group Litigation – brought in 2004 by over 400 residents in relation to pollution from a landfill site in Bletchley, Buckinghamshire – settled at mediation

3. Case brought by 263 residents in 2006 in relation to odour from a landfill site – settled

4. Case brought by 179 residents in 2008 in relation to odour from a landfill site - settled

5. Parkwood Group Litigation – brought in 2007 by 155 households in relation to pollution from a landfill site in Sheffield – settled at mediation

7. Case brought in 2008 by 5 households in relation to blight caused by foundry – settled at mediation

8. Case brought in 2008 by 179 households in relation to blight caused by a landfill site – settled at mediation

9. Case brought in 2009 by 6 households in relation to blight caused by a landfill site – settled the day before the trial

10. Case brought in 2009 by 43 households in relation to odour and other nuisance from two food factories – settled at mediation

11. Case brought in 2009 by 23 households in relation to odour nuisance from a food factory – settled

12. Case brought in 2010 by 56 households in relation to odour, dust and noise nuisance from a foundry – settled at mediation

13. Case brought in 2010 by 33 households in relation to odour nuisance from a pet food factory – settled

Appendix 3

Order made by the Rt. Hon. Lord Justice AIKENS

Decision

Granting Permission to Appeal

Reasons

This case raises important issues of general public importance in the question of whether a company that has a permit to engage in landfill near a residential area and who complies with its permit and is not negligent in its work can be liable in nuisance by private landowners who assert that the odour inevitably resulting from deposing waste in the landfill is a nuisance. The Judge concluded (at para 257) that there was no authority which addresses that issue. The arguments raised by the applicants have a reasonable prospect of success overall.

September 2011

Prepared 14th September 2011