Aarhus: Caps In The Air Again

 The Aarhus Convention requires that access to justice in environmental matters should be “be fair, equitable, timely and not prohibitively expensive”. 
Dear patient reader, you will recall that in 2013 the Government introduced a relatively simple mutual costs capping system. It is described in my 19 November 2016 blog post Mending Aarhus, along with a summary of the Government’s response to consultation in 2015 as to proposed changes to the regime to address a number of practical flaws or unfairnesses.
Rule 8(5) of the Civil Procedure (Amendment) Rules 2017  came into force on 28 February 2017, largely implementing the Government’s November 2016 proposals.
The new rules will change the nature of planning litigation in a number of important ways:
1. The procedure was available for judicial review litigation concerning “environmental matters”. The reference to “environmental matters” has been replaced by more specific references to claims within the scope of Articles of the Aarhus Convention that relate to access to environmental information and environmental assessment. Claimants challenging decisions in relation to non-EIA development may now find that they can no longer secure costs protection, even though their claim concerns environmental issues. 
2. The procedure is widened from judicial review litigation to include challenges to enforcement notice appeal decisions but, contrary to what the Government has previously indicated, not section 288 planning appeal decision challenges (nor indeed other statutory appeals, for instance in relation to plan making or compulsory purchase orders). 
3. The procedure is now only open to “members of the public” as defined in the Aarhus Convention (the Convention defines “the public” as “one or more natural or legal persons, and, in accordance with national legislation or practice, their associations, organisations or groups”). The interpretation will ultimately be for the courts to determine (more unnecessary cost and uncertainty) but in my view this is likely to exclude local authorities and other emanations of the state, including parish councils. The idea of a district or borough council seeking to rely on Aarhus costs capping in a claim against another council has sometimes been bizarre but query whether poor as church mice parish councils should be similarly shut out. 
4. Any claimant seeking to have its costs exposure capped will have to file and serve with the claim form a “schedule of the claimant’s financial resources which takes into account any financial support which any person has provided or is likely to provide to the claimant and which is verified by a statement of truth”. It will be crucial, in the short period of time available before the claim is filed and served, to make sure that what is said is both accurate and is not likely to lead the court, on application by the defendant or of its own accord, to increase or remove the caps, having regard to the following principles:
Varying the limit on costs recoverable from a party in an Aarhus Convention claim 45.44.—(1) The court may vary the amounts in rule 45.43 or may remove altogether the limits on the maximum costs liability of any party in an Aarhus Convention claim.
(2) The court may vary such an amount or remove such a limit only if satisfied that— 
* (a)  to do so would not make the costs of the proceedings prohibitively expensive for the claimant; and 


* (b)  in the case of a variation which would reduce a claimant’s maximum costs liability or increase that of a defendant, without the variation the costs of the proceedings would be prohibitively expensive for the claimant. 


(3) Proceedings are to be considered prohibitively expensive for the purpose of this rule if their likely costs (including any court fees which are payable by the claimant) either— 

(a) exceed the financial resources of the claimant; or 

(b) are objectively unreasonable 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 procedure;and 

(vi) whether the claim is frivolous

There are some big uncertainties in these criteria. For example, what are the “financial resources” of the claimant? Is the claimant expected to sell illiquid capital assets (such as his or her home, or cash in his or her pension) to meet a costs award that has a short deadline for compliance? If what is at stake is of great importance to the claimant, for example the loss of his home, should he be prepared to accept a higher cap? Does the claimant have to own up to what he is paying his own lawyer? How detailed must the information be as to financial support received from, for instance, contributors to a litigation fighting fund? Will potential contributors be discouraged from reaching in their pockets?
Is this the end of wealthy litigants, whether corporates or individuals, relying on costs capping? Few surely would have any problem with that (if you embark on litigation, be prepared to meet to the other side’s costs if you lose – someone has to) but will this also kick out the JAMs? Will the big NGOs face difficulties explaining that a cap of more than £10,000 would be prohibitively expensive? Will the uncertainties prevent potential litigants from embarking on proceedings in case they lose protection when it is too late in practical terms to back out?
5. Defendants who unsuccessfully challenge costs caps will no longer face an award of costs on an indemnity basis in relation to their challenge. Surely challenges will be much more frequent – and the threat, in responses to pre-action letters, of challenges to costs caps so as to discourage potential claimants. 
6. Any hearing on costs capping issues may be held “in private if it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality”. If hearings are required, which judges seek to avoid on costs cap issues so as not add to the costs burden of the parties, what personal financial information wouldn’t fall into that category?
7. The rules now make clear, in line with case law, that where there are multiple claimants, the £5,000 (for an individual) and £10,000 (for a group) caps apply to each claimant rather than being apportioned between them. 
8. The costs capping regime has now been extended to the Court of Appeal but only in the most sketchy way, not materially changing current practice. The Court of Appeal is simply directed to “consider whether the costs of the proceedings will be prohibitively expensive for a party who was a claimant” and “if they will be, make an order limiting the recoverable costs to the extent necessary to prevent this”.
The House of Lords Secondary Legislation Scrutiny Committee has strongly criticised the amended rules: “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”. 

Furthermore, in bad timing for the Government, the UN Aarhus Convention Compliance Committee published a report on 24 February 2017, only four days before the amended rules came into force, continuing to express concerns about the operation in England and Wales of costs capping in environmental cases and the changes that were consulted upon in 2015: “with the exception of the proposal to broaden the scope of “Aarhus claims” to include statutory appeals falling within article 9, paragraph 2, of the Convention” [ironically now not fully included as it transpires!] “all proposed amendments would increase rather than decrease uncertainty and risk of prohibitive costs for claimants”. 

The compliance of the amended rules with the Convention is heading for the courts, following a judicial review brought by ClientEarth, Friends of the Earth and RSPB. 
As both poacher and gamekeeper, what do I think? The 2013 rules have not been working badly but it has been absurd on occasion to see wealthy individuals and substantial companies and groups take advantage of extremely low costs caps in litigation against local authorities that have increasingly tight budgets. What would be wrong in that situation in having a mechanism for doubling or trebling the default £5,000/£10,000 cap, as long as the mechanism can be kept as fast and simple as possible? Balancing simplicity against fairness to all is as always the challenge – and for the developer sitting on the sidelines as an interested party the real devil, as always, is delay. 
Simon Ricketts 11.3.17
Personal views, et cetera

NB Invaluable to this piece was first a call from Nicola Gooch at Irwin Mitchell on 28 February, then this good Will Upton blog post and then finally a thought-provoking Francis Taylor Building event presented by Robert McCracken QC, Ned Westaway and Charles Streeten.

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