13 – The Aarhus costs rules: time for reform?

A new joint report has been published by ELF, Friends of the Earth and the RSPB. The Report is entitled “A Pillar of Justice II”, following on from their previous 2019 report. The headlines are as follows:

Prohibitively high costs are pricing individuals and community groups out of bringing legal challenges in England and Wales that seek to protect the environment. The number of environmental JRs has reduced significantly in recent years.

This may be caused by changes in the rules which allow a variation of the Aarhus costs cap, as well as the imposition of the reciprocal cap and the rule of “one cap per claimant” rather than “one cap per claim.”

Despite this, environmental JRs have a much higher “success rate” than normal JRs, to the extent that can be properly measured (10% versus 3%, albeit this does not appear to incorporate settlements or withdrawal of claims that become academic).

The authors recommend a series of measures including removing the reciprocal cap, the one cap per claimant rule, and the ability to vary the cap, and reinstituting indemnity costs to unsuccessful challenges to Aarhus claim status.

Are they right? Have recent costs rules reforms had a chilling effect on environmental JRs? Or are the current Aarhus cost cap rules broadly acceptable? Our barristers make the case for and against…

The case for the report: change is needed to the Aarhus cost capping rules – Alex Shattock

In my view, this is a welcome report that highlights the real difficulties faced by environmental claimants.

It is important to emphasise that when you are the claimant in an environmental JR, the cards are very much stacked against you;

As a claimant you start by doing all the leg work. You have to set out the relevant facts, you have to provide all the evidence, and you have to formulate the grounds of challenge (and you will be criticised if you stray from that path!), all on a tight budget -if indeed there is a budget- and often on limited information.
If you’ve managed all that, you then need to persuade an often sceptical and deferential judge that your grounds of challenge are made out- perhaps in respect of a highly controversial political issue that the judge would rather not make headlines about.

By contrast, if you’re on the Defendant side, you hold most of the cards:

If you are for the Secretary of State, you have all the information you need, and can expect a high dose of deference from the Court.
If you are for an IP, you have significant resources at your disposal, and chances are you are working with one of the best professional teams in the business.
In both cases, you only have to respond to the claim as pleaded.
In both cases, you have a veritable selection box of initial defences you can deploy- prematurity, alternative remedy, out of time, the error identified would make no difference- before you even need to discuss the merits of the claim.
And once you get past setting up those initial barriers- and your standard couple of defence paragraphs deployed in the Planning Court (“this is yet another example of the kind of hypercritical, over legalistic scrutiny that the Court has long deprecated…” etc etc)- you often have the additional benefit of only needing to show that the decision under was a rational one. (NB: the “light touch” rather than substantive nature of environmental review in the UK is currently before the Compliance Committee at the moment!)

So it’s really no wonder that only 10% of environmental JRs “succeed”, although of course we should be cautious about success rate figures in JR given there is scope for debate about what counts as a success.

In that context, it is surprising that the costs rules have been changed over time to make it even harder for an environmental JR even to get off the ground, given the difficulties these kinds of claim already face.

I work with lots of NGOs and community groups, and the spectre of adverse costs under Aarhus looms large. Clients often know that they face an uphill struggle, but the key issue for them is usually the cost if they lose. Even with the cap, £5k or more is a significant figure on top of your own legal costs and court fees. And we should remember, the English and Welsh principle of adverse costs liability in civil cases is very much not the norm when we look at the global picture (it is not even the case in a number of civil cases in Scotland any more).

The current rules do need a rebalancing in favour of claimants, not least because they currently create perverse incentives- e.g. why bother fundraising at an early stage, if this will be used against you later in an application to vary the cap?

The reciprocal cap is also something that makes little to no sense. The justification is given in terms of fairness- but that assumes a false parity between the resources of a member of the public and the resources of the state. Moreover, it is only meritorious claims that are penalised by this rule- how exactly is that “fair”, if that is the justification? If a claimant overcomes the jurisdictional bars, and the permission stage, and wins in the final hearing, and persuades the court that the result would not have been the same had the legal error identified not occurred, and persuades the court to grant the relief sought- why should that claimant not get their costs, and still be out of pocket at the end of the day?

The recommendations in this report should be adopted. The variations regime should go, as should the reciprocal cap. The cap should apply to a claim, not a claimant. And the previous indemnity costs penalties should apply to those who fail to argue an Aarhus case is not an Aarhus case.

Even if all the sensible reforms proposed in this report are implemented, ‘the cards will still be very much stacked in the Defendant’s favour. But at least a few more members of the public will be given a chance to turn up at the table.

The case against the report: the Aarhus cost capping rules working as they should do – Nick Grant

It has long been a principle of English law that costs follow the event. The reason is simple: a claimant puts a defendant to cost and expense in defending a claim, and a defendant should not have to bear those costs if the claim is unsuccessful. The same applies to judicial review, but the costs are borne by the tax – or rate-payer. In Aarhus claims – a category which is already widely drawn, and where costs protection applies even if there is only one environmental ground out of 20 – Claimants already benefit from costs protection of £5,000-£10,000 inclusive of VAT (unless varied). This regularly results in overstretched public authorities picking up a not insignificant tab, even where the defendant wins hands down; even where the Claimant’s intention was never actually to win, but to raise awareness of an issue or score political points. The question is whether these rules should be made even more permissive and the public purse should be made to bear more of these costs. The answer is no.

Many of the points made relate to the difficulties of bringing an environmental judicial review. Some can be dispensed with simply: it is not the case that judges are uniformly sceptical; and the informational asymmetry is overstated given the duty of candour (see the recent Police Superintendents’ Association case). Beyond that, there is no dispute that bringing an environmental JR is an uphill struggle, but that is a function of the system democratic bodies have put in place: the primary decision maker is administrative precisely because they are accountable in some way and have expertise in, say, complex scientific judgments. Aggrieved claimants undoubtedly take the view they know better – they may well be right in some cases – but it is not their decision to make. This debate isn’t about those difficulties, it is about the level of costs to be borne by the taxpayer. There is a strong case for making no change to the current rules.

First, the strongest point in the Authors’ favour would be if the current costs cap were really a barrier to potentially successful claims being brought. The Report cites 12 anecdotal examples over four years, and a general downward trend in environmental JRs from c. 2015/16. There is real merit in the suggestion (p. 30) that better data from the MOJ and a review of Aarhus protections would / should / could usefully uncover the reasons for that decline. Without that, it’s too big a leap to suggest this is down to the costs rules. Other causes could well be, for example, the tightening up of avenues of legal argument as the law develops. Moreover, success rates have hovered at c. 10% of claims brought (p. 5). There is no indication there is a wealth of potentially successful claims waiting in the wings.

Second, there are already sufficient protections in the current system. Costs caps can be, and have been, varied downwards -although there appears to be very limited data on how often such a variation has actually been sought. Upward variation, though an option, is minimal. CPR r. 45.44 prohibits an upward variation if it would make a claim ‘prohibitively expensive’ for the Claimant, and that includes taking into account the Claimant’s own costs. Between March 2017 and May 2019 an upward variation occurred in only 2.5% of the 279 Aarhus cases. Claimants who are still genuinely worried, ATE insurance products are available for judicial review claims which can cover both the opponent’s and claimant’s own costs in case of a loss.

Third, although many of the recommendations are sensible (particularly those seeking clarity on appellate costs caps or injunction cross undertakings (p. 33-34)), cumulatively they go too far. For example:

Limiting cap variation to downward only (for claimants, p.4) will benefit rich litigants. It is not only local communities with limited funds who seek to bring environmental JRs: rival developers, rival superstores, or extremely wealthy landowners do the same. There is no reason why these entities should be insulated from the costs they cause the taxpayer, particularly where protections already exist for the truly impecunious.
The suggestion that Aarhus caps should apply to the claim, not the claimants (p. 33), raises the likelihood of multi-claimant litigation and unwieldy and complex proceedings. It is not unusual, even at the moment, for communities to co-ordinate behind one named claimant who can make all salient points, and there is no reason why that cannot or should not continue. Multi-party litigation adds further unnecessary costs to the public purse.
Removing interested parties’ ability to recover their costs of filing an AoS and SGR is unnecessarily penal (p. 34). Many IPs are seeking to protect a valuable right – their planning permission, and they have to respond under CPR Part 54 if they want to be able to argue their claim. There is no reason why they should have to bear those necessary costs if the Claimant’s claim doesn’t even meet the (low) arguability threshold. The Report suggests that costs ordered at permission stage should be “reasonable and proportionate” – but that is already the effect of CPR part 44 and the standard basis. The fact these reasonable and proportionate costs can mount up simply shows that claimants can put defendants to significant costs in defending these claims.

To sum up – this debate isn’t about how hard it is to bring an environmental JR; it is about how much already stretched public authorities can be expected to subsidise the 90% of claims which fail. The Report contains many sensible recommendations, but its package of reforms simply goes too far.

Please note: Nick and Alex have been asked to take these positions for the purpose of the blog. Opinions may or may not be their own.

Authors

– James Maurici KC – James has been in many of the leading cases on Aarhus costs including: R (RSPB) v SSJ [2017] 5 Costs L.O. 691; Case C 530/11 Commission v United Kingdom; Case C-260/11 Edwards v EA; R (Edwards) v EA (No.2) [2011] 1 Costs L.R. 70 and [2013] UKSC 78; and R (Edwards) v EA [2011] 1 W.L.R. 79. He has also appeared a number of times before the UNECE Aarhus Compliance Committee in Geneva, cases include: ACCC/C/2010/45; ACCC/C/2010/53; ACCC/C/2011/60; ACCC/C/2011/61; ACCC/C/2012/77; and ACCC/C/2014/100 and 101. He is currently acting for the UK Government on the Brexit communication to the Compliance Committee – ACCC/C/2017/150. He was one of the contributors to the Aarhus Convention: A Guide for UK Lawyers (2015) and he has written and lectured extensively on the Aarhus Convention.

– Jacqueline Lean – Jacqueline has also been instructed on a number of matters concerning the Aarhus Convention, including appearing (with James Maurici KC) for United Kingdom before the Aarhus Compliance Committee on two communications concerning the Government’s decision to proceed with HS2 (ACCC/C/100 & 101); representing the Secretary of State for Communities and Local Government Secretary of State in R (CPRE Kent) v Secretary of State for Communities and Local Government [2019] EWCA Civ 1230 in which the Court of Appeal considered the approach to summary assessment of costs at permission stage when an Aarhus costs cap applied; and acting for the Secretary of State in R (RSPB) v Secretary of State for Justice [2018] Env LR 13, a challenge to the Government’s amendments to the Aarhus costs protections in the CPR (also with James Maurici KC). She is also a contributing author to Coppel’s ‘Information Rights’ on Environmental Information.

– Nick Grant – Nick joined Chambers in 2019 and has regularly advised on Aarhus related matters. He has represented the UK twice before the Aarhus Convention Compliance Committee, appearing with James Maurici KC in ACCC/C/2017/150 (the Withdrawal Act case) and unled in the admissibility hearing for ACCC/C/2022/194 (the free trade agreements case).

– Alex Shattock – Alex has been involved in a number of environmental claims including Friends of the Earth v SSLUHC (the Cumbria coal mine case: acting for Friends of the Earth in the Planning Inquiry and High Court, with Paul Brown KC and Toby Fisher); Cox and Ors v Oil and Gas Authority [2022] EWHC 75 (Admin) (representing Extinction Rebellion activists in a challenge to the Oil and Gas Authority’s Strategy, with David Wolfe KC and Merrow Golden); R (Hough) v SSHD [2022] EWHC 1635 (acting for the claimant in an environmental and equalities challenge to the controversial use of Napier Barracks as asylum seeker accommodation, with Alex Goodman and Charles Bishop). He regularly advises individual and NGO clients on Aarhus costs protection. Alex also has a keen interest in treaty law generally. He has a masters and PhD in public international law and has been involved in various treaty negotiations and treaty ratification processes.