Date laid: 3 February 2017
Parliamentary procedure: negative
The Aarhus Convention (implemented in EU law by a series of Directives) requires Contracting States to make sure that the costs of taking certain environmental challenges through the courts are not prohibitively expensive. This instrument, among other things, introduces a revised costs protection regime for Aarhus Convention claims, that provides more discretion for the court to put cost caps up or down according to the claimant’s resources. The very negative response to the consultation exercise raised a number of concerns including how the claimant’s resources were to be assessed and the risk of satellite litigation to settle disputes over ancillary matters. Respondents’ key concerns were that the changes were likely to increase the claimants’ uncapped legal costs and would deter claimants from pursuing genuine claims. A submission from Client Earth, Friends of the Earth and the RSPB, published on our website, further illustrates these concerns. The Explanatory Memorandum that the Ministry of Justice has provided gives no evidence-based justification for the proposed changes or for the effect that they are assumed to produce, in consequence, our Report suggests a number of questions that the House may wish to pursue. We have also written to the Minister to express our concerns over the way that this policy change was presented.
This instrument is drawn to the special attention of the House on the ground that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation.
1.These Rules have been laid by the Ministry of Justice (MoJ) under the Civil Procedure Act 1997 and are accompanied by an Explanatory Memorandum (EM). This instrument makes a variety of amendments that include administrative changes to rules governing the payment and refund of hearing fees, costs budgeting procedures, clarification of the application of a fixed costs regime in low value personal injury claims, introduction of a revised costs protection regime for Aarhus Convention claims, streamlining procedures for shipping collision cases, minor amendments to provide for an appeal route in Patents, and a change to how European references are made. We have received a submission from Client Earth, Friends of the Earth and the RSPB which relates specifically to the revised costs protection regime. Their submission is published in full on our website with further material from the MoJ.
2.Sections 88 and 89 of the Criminal Justice and Courts Act 2015 (“the 2015 Act”) codify the powers of the courts to make protective costs orders in judicial review proceedings (“costs capping orders”). Costs capping orders limit or extinguish an applicant’s liability to pay another party’s costs irrespective of the outcome of the case. The court will consider the financial resources of each party when determining whether to make a costs capping order and, if one is appropriate, will specify what the terms of that order should be. These provisions came into force on 8 August 2016.
3.Another instrument made under section 90 of the 2015 Act, also laid on 3 February 2017, excludes claims under the Aarhus Convention from the general system of costs capping orders in judicial review proceedings on the ground that there is a separate regime for Aarhus Convention claims. The amendments to the Rules made by the current instrument amend the terms of that regime.
4.The Aarhus Convention (implemented in EU law by a series of Directives) requires Contracting States to make sure that the costs of taking certain environmental challenges through the courts are not prohibitively expensive. The Government took steps to address this issue for England and Wales in April 2013 by introducing an Environmental Costs Protection Regime (ECPR), which capped the costs that a court could order an unsuccessful claimant to pay to other parties at £5,000 for individuals and £10,000 for organisations. Defendants’ liability for claimants’ costs were similarly capped, at £35,000. All of these amounts were fixed and did not allow for variation in individual cases.
5.The European Court of Justice (CJEU) gave its judgment in a 2014 case that the costs regime that had existed in 2010 (before the new ECPR had been put in place) was insufficient to comply with EU law. These new provisions have been drafted in response to that ruling and other judgments by the CJEU.
6.The new provisions, like those they replace, default to a cap on the liability of an unsuccessful claimant in such a case to pay the defendant’s costs of £5,000 or £10,000 (depending on whether the claimant is an individual or an organisation), and cross-cap an unsuccessful defendant’s liability to pay the claimant’s costs at £35,000, but differ in certain respects. They
(a)extend beyond judicial reviews to include statutory reviews (in particular planning challenges);
(b)allow the court to vary the cap and cross-cap either up or down, provided that any change does not render the cost of proceedings prohibitively expensive for the claimant;
(c)require the court, when assessing whether proceedings would be prohibitively expensive if the change is or is not made, to take into account a list of factors which mirrors those set out by the CJEU in the Edwards case; and
(d)make specific provision for appeals requiring the court to apply the same principles on appeal as at first instance (as required by the Commission v. United Kingdom case).
7.Rule 45.44 in the instrument sets out the criteria for deciding whether the proceedings are to be considered prohibitively expensive for the claimant (based on the “Edwards principles”) as:
(a)whether they exceed the financial resources of the claimant and
(b)are objectively reasonable having regard to
(i)the situation of the parties;
(ii)whether the claimant has a reasonable prospect of success;
(iii)the importance of what is at stake for the claimant;
(iv)the importance of what is at stake for the environment;
(v)the complexity of the relevant law and the procedure; and
(vi)whether the claim is frivolous.
We note that the EM states that no specific guidance is considered necessary on how these rules will operate.
8.In regards to the assessment of a claimant’s resources the:
“Government is proposing a similar approach to that which it adopted when implementing the recent Judicial Review Cost Capping Order reform, whilst recognising that there are different requirements in the context of the ECPR, where a key consideration is that the costs of challenges should not be prohibitively expensive. Unless the court ordered otherwise, the claimant would provide information on significant assets, income, liabilities and expenditure. This information would take account of any third-party funding which the claimant had received. It is anticipated that this approach would limit the burden and intrusion on the claimant and, alongside the possibility that hearings could be held in private, means the approach would not deter claims. It is not intended that charities should provide details of individual donors or individual donations.”
9.The submission from this group states that their main concern is that the revised regime removes the advance certainty of financial liability from claimants if they lose the case and that this will deter all but the rich from pursuing such cases. The submission also highlights the difficulties that the requirement for financial disclosure would impose on claimants in particular for non-governmental organisations (NGOs) and charities which have complex funding bases.
10.The group is also concerned that “satellite litigation” around the issue of costs will detract from the substantive issues and cause delays. They also point out that the costs cap relates only to the claimant’s liability to pay the defendant’s costs, the claimant’s own legal costs are not included. The Government’s stated intention of “introducing more of a level playing field so that defendants are not unduly discouraged from challenging a claimant’s entitlement to costs protection” may escalate the claimant’s legal costs and act against the intention of the Aarhus Convention that the costs of environmental litigation should not be prohibitive.
11.As one of the MoJ’s stated aims in the consultation paper was that the new arrangements should provide “greater certainty within the regime” the submission contends that the opposite has been achieved and cites the example of the Norwich Northern Distributor Road case to illustrate that view.
12.The policy aim as stated on the front of the draft Impact Assessment, and repeated in the Government Response document, is that:
“the policy should ensure the right balance between ensuring ‘the public can bring challenges which are not prohibitively expensive to relevant decisions falling within the scope of the relevant EU Directives, while discouraging unmeritorious claims which cause unreasonable costs and delays to development projects.”
13.The submission calls attention to the MoJ’s failure to provide evidence that the number of “unmeritorious claims” is a problem. It provides data which shows that the number of Aarhus cases in 2014–15 was 153 which is on a par with the established average. They also comment that between April 2013 and March 2015, nearly half (an average of 48%) of environmental cases were granted permission to proceed in contrast with 16% of ordinary Judicial Review cases. Over the same period 24% of the environmental cases were successful for the claimant in contrast with 2% for all cases in 2014. All of which indicates, according to the submission, that environmental cases represent good value for money in comparison with mainstream judicial review cases.
14.The analysis in the EM simply states that the consultation exercise received 289 responses. It does not explain, as it should, that for most of the questions the number supporting the government’s proposal was less than ten: the vast majority of the responses received were against the proposed changes.
15.In assessing the responses it should be noted that 103 individuals used a template response prepared by Friends of the Earth. The remaining respondents represented a wide range of interests including 82 responses from businesses, campaign groups, professional bodies, public organisations, non-governmental organisations, academic institutions, parish councils, law firms and representative bodies. All largely disagreed with the package of proposals, although for mixed reasons.
16.We note with particular concern that 216 of the 221 respondents considered that the criteria set out at proposed rule 45.44(4) did not properly reflect the “Edwards principles” (nearly 98%). As this is a key factor in how the claim will be assessed the Government should have more fully explained their interpretation in the EM and any changes they have made to the proposal since the consultation.
17.The consultation document states that “The Government intends to review the impact and application of these changes, and to consider whether, in the light of experience, any other changes to the procedure for such cases should be made. This is expected to be within 24 months of implementation when sufficient data should be available”. We note that this undertaking is not mentioned in the EM, contrary to accepted best practice. The Government should clarify whether that is still their intention.
18.The requirement of Article 9 of the Aarhus Convention is that, in relation to environmental matters, contracting parties “shall provide adequate and effective remedies, including injunctive relief as appropriate, and be fair, equitable, timely and not prohibitively expensive”. The MoJ has not provided a convincing case for changing from the previous standardised system of cost capping, which was well understood, to this more complex system which appears to have significant potential to increase both the costs for public administration and the uncapped litigation costs of the claimant.
19.While asserting that the changes are to “discourage unmeritorious claims” no figures are presented that illustrate the proportion of Aarhus claims that fall into that category. We are told that the financial impact on the public sector is minimal, so there does not appear to be a significant saving to the tax payer from these changes. Although the MoJ states that its policy intention is to introduce greater certainty into the regime, the strongly negative response to consultation and the submission received indicate the reverse outcome and that, as a result of the increased uncertainty introduced by these changes, people with a genuine complaint will be discouraged from pursuing it in the courts. The Ministry of Justice has not addressed any of these concerns in its paperwork and we therefore draw the matter to the special attention of the House on the ground that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation. We have also written to the Minister to express our concerns over the way that this policy change was presented.
1 Criminal Justice and Courts Act 2015 (Disapplication of Sections 88 and 89) Regulations 2017 (SI 2017/100).
2 Case C-530/11 European Commission v. UK  3 WLR 853.
3 Case C-260/11 Edwards v. Environment Agency  1 W.L.R. 2914, parts of which were reiterated by the Supreme Court in the same case: R (Edwards) v. Environment Agency (No.2)  1 W.L.R. 55.
4 Para 39 of the .
5 Para 5 of the .
6 For example at .
8 Para 53 of the