Legal Update: NGOs win challenge to Aarhus costs caps

2 October 2017


[2017] EWHC 2309 (Admin)

A judicial review application by three NGOs over recent amendments to the costs capping rules governing public law environmental claims has been largely successful.

The general rule in civil litigation in England and Wales is that the unsuccessful party will be ordered to pay the legal costs of the successful party. As the costs of defending a judicial review claim can be substantial, it has been recognised that this may deter potential claimants from pursuing even meritorious challenges. The UK is a signatory to the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters. In pursuit of the goal of access to justice, the UK introduced a costs cap for environmental judicial review claims, which capped the claimant’s potential liability for the defendant’s costs at £5,000 (£10,000 for companies) and limited the recovery of the claimant’s costs from the defendant to £35,000. Recently, Lord Jackson’s Review of Civil Litigation costs has suggested extending this costs regime to apply in all judicial review cases where the claimant is an individual without legal aid (see our comment here).

In February 2017, the Civil Procedure Rules were amended, giving courts a broad discretion to vary or remove the maximum costs liability of any party in an Aarhus Convention claim. Many argued that these new amendments would substantially dilute the costs protection afforded by the default costs cap as described above, and be a significant deterrent to claimants, as they introduced uncertainty about the claimant’s potential costs liability.

In this case, three NGOs (The Royal Society for the Protection of Birds, Friends of the Earth Limited and Client Earth) sought to challenge these amendments to the Civil Procedure Rules on three grounds:

  1. That the new amendment allowing for a variation of the costs cap breached the UK’s obligations to implement the Aarhus Convention under EU law;
  2. That the new amendment should have provided for mandatory private hearings of contested applications to amend the costs cap because a claimant or a third party financial supporter’s confidential financial details would necessarily need to be discussed; and
  3. That a declaration should be granted that the assessment of a claimant’s financial resources for the purposes of evaluating whether or not costs protection should be afforded and whether or not the proceedings are prohibitively expensive should necessarily include that claimant’s own legal costs of bringing the case.

On the first ground, the High Court held that the amendments did not breach EU law when the surrounding context of UK procedural rules and judicial practices on when a costs cap may be varied was taken into account. The effect of this context was that it would generally only be open to the defendant to seek to vary the costs cap at the permission stage except in very limited circumstances, namely when the claimant had provided false and misleading information or when their means changed at a later stage of the case. In all other cases, final decisions about costs capping should be made at an appropriately early stage of the case. The court agreed with the NGOs on their second ground, holding that cost cap hearings should be held in private in order to protect confidential financial information and prevent any resulting ‘chilling effect’ on litigation. This will apply equally to both private individuals and other legal persons (such as voluntary companies), and applies whether the information is that of the claimant or of any third party donors. Finally, the third ground was conceded by the defendant so the Court did not feel it was necessary to grant relief in the form of a declaration.

The overall implication of this judgment is that much of the anticipated deterrent effect of the new amendments is now unlikely to arise. In the future, any costs cap hearing should be private, and the courts will have to take into account the claimant’s legal costs. Most importantly, in the ordinary course of events, a claimant should continue to have at least a reasonable ability to predict what the worst financial outcome will be soon after or at the outset of the case. 

By Kirsty Cook, Paralegal with input from Nick Wrightson, Senior Associate.

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