Source: https://simonicity.com/category/costs/
Timestamp: 2020-01-28 10:31:21
Document Index: 490821821

Matched Legal Cases: ['CJEU ', 'art 45', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ']

Costs – SIMONICITY
Exactly a week after the Westferry Printworks decision letter (see my previous blog post) on 22 January 2020 the Secretary of State allowed two further appeals in relation to significant London residential development projects, this time both decisions following his inspectors’ recommendations, and with costs awards in favour of the appellants, again as recommended by his inspectors.
Given that an award of costs can basically only be made on the basis of unreasonable behaviour by a party to the appeal (see the detailed advice in the Government’s Planning Practice Guidance), lessons plainly need to be learned – in fact what happened in both cases was pretty shocking.
North London Business Park site, Barnet
This was an appeal by Comer Homes Group against Barnet Council’s refusal of a hybrid application for planning permission for the phased comprehensive redevelopment of the North London Business Park to deliver a residential led mixed-use development:
• detailed element comprising 376 residential units in five blocks reaching eight storeys, the provision of a 5 Form Entry Secondary School, a gymnasium, a multi- use sports pitch and associated changing facilities, and improvements to open space and transport infrastructure, including improvements to the access from Brunswick Park Road, and
• outline element comprising up to 824 additional residential units in buildings ranging from two to eleven storeys, up to 5,177m2 of non-residential floorspace (Use Classes A1-A4, B1 and D1) and 2.9 hectares of public open space, associated site preparation/enabling works, transport infrastructure and junction works, landscaping and car parking.
This is the Secretary of State’s decision letter and inspector’s report in relation to the appeal and this is the Secretary of State’s decision to make a full costs award against the council, following the inspector’s recommendations.
Members had refused the application against officers’s recommendations.
The council’s failing is set out starkly in the inspector’s costs report: no proper evidence was adduced to support its decision:
“Mr Griffiths, Principal Planning Officer at the Council of the London Borough of Barnet, was the Council’s only witness at the Inquiry. He stated, in his proof of evidence, that “It is not the intention for this document to represent my professional opinion and the evidence presented represents the views of elected members of the London Borough of Barnet Planning Committee”.
The proof of evidence focusses on a particular view contained within a TVIA submitted by the Applicant and states that “Within View 11, the 8-storey height of Blocks 1E and 1F stands in harmful juxtaposition with the two-storey height of the properties on Howard Close”. But the proof acknowledges “…that buildings of up to 7 storeys in height could be acceptable in this location therefore it is pertinent to outline the additional harm that would arise from the 8 and 9 storey buildings proposed within the development and why these heights are unacceptable”.
The written evidence fails to substantiate why the extra storey on Blocks 1E and 1F would cause harm and fails to consider the effect of buildings over seven storeys in height elsewhere in the development. The proof simply repeats the assertion made in the sole reason for refusal of the application that “The proposed development, by virtue of its excessive height, scale and massing would represent an over development of the site resulting in a discordant and visually obtrusive form of development that would fail to respect its local context…to such an extent that it would be detrimental to the character and appearance of the area”.
Under cross examination Mr Griffiths refused to answer some questions put to him and to give his professional view on the effect of the proposed development on the character and appearance of the area. The Appellant was not thus afforded the opportunity, at the Inquiry, to explore the unsubstantiated assertions made in the proof of evidence and did not learn anything more about members concerns. Crucially, no member of the Planning Committee appeared at the Inquiry to substantiate their views that was unsubstantiated in the proof of evidence.
The Council has failed to produce either written or verbal evidence to substantiate the reason for refusal of the application, and has provided only vague and generalised assertions, unsupported by an objective analysis, about the proposed development’s impact. The Council has behaved unreasonably and the Appellant has incurred unnecessary expense in the appeal process. A full of award of costs against the Council is justified.”
It was hardly surprising that the Secretary of State decided to allow the appeal:
“32. The development plan restricts tall buildings to identified locations, and the proposal would include them on a site not identified as suitable for them. This conflict carries significant weight against the proposal.
33. The proposal has been designed to respect the existing character of the local area, while maximising the potential for delivering homes. It would deliver a replacement secondary school alongside new open space, sports facilities and community space. The local authority is unable to demonstrate a five-year supply of housing land without taking account of this site, and the proposal would provide 1350 new homes. The provision of the housing and the ancillary facilities both carry significant weight in favour of the proposal.
34. The Secretary of State considers that there are material considerations which indicate that the proposal should be determined other than in accordance with the development plan, and therefore concludes that the appeal should be allowed and planning permission granted.”
The inquiry sat for four days in October and November 2018 (why the inordinate delay since then?), with the appellant team comprising Christopher Katkowski QC and Robert Walton (now QC), calling four expert witnesses. The costs award will amount to a sum that would be ruinous for many private sector bodies, well into six figures – because council members took a decision without evidence and without considering whether proper evidence, or a different approach, might be required in the face of an appeal. And a scheme for well over a thousand homes and a school (first applied for in December 2015!) has been delayed for absolutely no reason.
Conington Road, Lewisham
This was an appeal by MB Lewisham Limited against Lewisham Council’s decision to refuse its application for planning permission for the construction of three buildings, measuring 8, 14 and 34 storeys in height, to provide 365 residential dwellings (use class C3) and 554 square metres (sqm) gross of commercial/ community/ office/ leisure space (Use Class A1/A2/A3/B1/D1/D2) with associated access, servicing, energy centre, car and cycle parking, landscaping and public realm works.
This is the Secretary of State’s decision letter and inspector’s report and this is the Secretary of State’s decision to make a partial award of costs against the Mayor of London, and inspector’s report.
The procedural position here was a little more complicated. After Lewisham had refused this application, the applicant had submitted a further application for planning permission which sought to address the reasons for refusal. The scheme would secure 20.19% affordable housing by habitable room, which the council accepted, on the basis of viability appraisal, was more than the maximum reasonable provision. The Council resolved to approve the application but the Mayor directed refusal, not satisfied that the viability work justified that level of affordable housing.
By that time the first application had been refused and the appellant revised the scheme to reflect the changes introduced into the second application. Accordingly, whilst the appeal was technically against Lewisham’s initial decision on the first application, in reality the only live issues were those raised by the Mayor on affordable housing and viability, including whether a late stage review mechanism was necessary in line with its policy requirement.
I suspect that you needed to be at the inquiry to appreciate the full horror as events unfolded (I wasn’t) but it appears that the viability case against the appellant’s position completely collapsed at the inquiry following exchange of evidence and cross-examination by Russell Harris QC. But that wasn’t the only problem. Presumably to save costs, the council and the Mayor both engaged the same advocate at the inquiry and, once it understood the real position on viability, the council wished to concede various issues but the Mayor was not willing so to do, meaning that the advocate immediately had a conflict of interest and, mid-inquiry, had to recuse herself from acting for the Mayor! The Mayor’s team continued to participate in the inquiry but without challenging the evidence provided by the appellant.
This is from the inspector’s report on the appellant’s costs application:
“On day 2 of the Inquiry, following cross-examination of the Council’s construction costs witness Mr Powling, the advocate representing the Council and the Greater London Authority (GLA) advised that due to a conflict of interest, the GLA would no longer be represented. The GLA however wished to continue with their objections as an unrepresented principal party. Later in the afternoon, following cross-examination by the appellant of Ms Seymour for the GLA, the Council formally withdrew its objections to the proposal on viability grounds. The Council took no further part in the Inquiry.”
“Where the operation of a direction to refuse is issued, the GLA is to be treated as a principal party. Without the GLA direction, the London Borough of Lewisham (LBL) would have granted a planning permission for a now identical scheme. This appeal only arises thus as a result of the change of the resolution to grant to reflect the terms of the GLA’s direction.
6. In its letter to the Inspectorate indicating its intention to attend, the GLA made it clear that was prosecuting its direction in terms and was expecting LBL to do the same. Therefore for all practical legal and policy purposes, the GLA must be treated as a main party prosecuting the terms of its direction at this appeal. Without that direction LBL would not have opposed this scheme and this inquiry would not have been necessary.
7. Their conduct therefore falls to be considered in accordance with the provisions for principal parties.
8. Its conduct was unreasonable in substantive terms in relation to its directed main reason for refusal. Its conduct during the inquiry was also unreasonable. Both levels of unreasonableness resulted in the inquiry and the appellant having to incur significant unnecessary expense in relation to the affordable housing issue.
9. In substantive terms, the GLA produced no evidence which met or came close to the requirements of the PPG on the issue of construction costs to support its reason for refusal.
10. Its ‘evidence” failed to meet the threshold properly to be called “evidence” It failed to engage with the agreed evidence of others that the construction costs were fair and reasonable and during the proceedings failed to read understand or engage with evidence which clearly established that its evidence was incorrect and unreasonable.
11. In terms of the double count issue, the GLA persisted with its case irrespective of evidence suggesting that it was wrong and in an unreasonable fashion after the only other relevant party advised by Leading Counsel had accepted that the point was simply not properly arguable. It chose not to read and understand the clear evidence, notwithstanding it had insisted on the reason for refusal and that it be a party at the inquiry.”
“The Greater London Authority shall pay to MB Homes Lewisham Ltd its partial costs of the inquiry proceedings, limited solely to the unnecessary or wasted expense incurred in respect of the costs of the appeal proceedings related to dealing with the issue of affordable housing after the Council decided not to represent the Greater London Authority, such costs to be taxed in default of agreement as to the amount thereof.”
The Secretary’s conclusions on viability were as follows:
“17. The Secretary of State agrees with the Inspector that the essential differences on viability between the parties lies in a variation of around £11m in construction costs (including fees and profit); and private residential values (IR127).
18.	The Secretary of State notes that CDM (for the GLA) consider build costs to be overstated (IR129). However, the Secretary of State also notes that independent costs estimates produced by 3 firms of costs consultants were within 2 percentage points of each other. He agrees with the Inspector that no evidence has been produced in any later analyses to show that those build costs, or any element of them considered for viability purposes, are unreasonable (IR128-131).
19.	The Secretary of State notes that the level of fees remained a point of difference at the beginning of the Inquiry. The Secretary of State also notes that while detailed analysis of this issue did identify an overstatement of fees of less than £1m, this is far below the overstatement claimed by the Council and GLA. He further notes that, at the Inquiry no evidence was forthcoming from the GLA’s costs witness, CDM, to support their contention that preliminaries are set too high or that the level of professional fees of around 10% would be excessive for a project of this nature. In addition, the Council’s costs witness accepted that if a reasonable preliminaries figure of 17% or so was adopted then the whole argument in support of the £5.5m fees deduction from the overall level of costs fell away (IR132-133).
20.	For the reasons given in IR134-135, the Secretary of State agrees with the Inspector that the proposed profit levels are reasonable for this scheme.
21.	For the reasons given in IR136 the Secretary of State agrees with the Inspector that no evidence was offered by the Council or the GLA to counter the appellant’s build costs analysis or the level of fees or profit.
Private residential values
22.	The Secretary of State has carefully considered the Inspector’s analysis in IR137-146 and agrees that the GLA’s suggested values would be unlikely to be achievable in the market (IR144).
23.	The Secretary of State also notes that the GLA accepted at the Inquiry that if the £11m alleged surplus on fees and construction costs did not exist, then the claimed remaining £900,000 (IR132) would not have led to a direction to refuse from the Mayor’s office (IR146). For the reasons in IR147, the Secretary of State agrees with the Inspector that the 20.2% affordable housing proposed by the appellant is the maximum, if not somewhat more, than what can be reasonably provided, and he accordingly attaches very considerable weight to this benefit of the proposal. He finds no conflict with the requirements of LonP policy 3.12; the Mayor’s Affordable Housing and Viability SPG, Lewisham CS policy 1 and DMLP policy DM7.
24.	For the reasons given in IR148-149, the Secretary of State agrees with the Inspector that there is no pressing case for a late stage review for a scheme such as this, where development is proposed to be completed in a single phase. He finds no conflict with the requirements of LP policy 3.12, the Mayor’s Affordable Housing and Viability SPG, Lewisham CS policy 1 and DMLP policy DM7.”
“In favour, the Secretary of State affords very considerable weight to the provision of market and affordable housing. He also affords moderate weight to the positive contribution to the character and appearance of the emerging Lewisham Town centre.”
And no late stage review!
In amongst the horror show for both the council and the Mayor seems to have been some simple lack of communication as between their witnesses. Quoting from the inspector’s summary of Lewisham’s case:
“When the appellant’s viability proof was received and reviewed it did not appear that the short reference in paragraph 7.2 to the Gardiner & Theobald review report raised any pertinent issue. This was particularly so as the proof suggested that the appellant’s basis for assessment of costs was unaltered.
As a consequence the Council’s viability witness did not send its costs witness the appellant’s viability proof (which dealt with numerous other issues not relevant to costs estimates). On review at the Inquiry, the Council’s build cost estimate was revised from £107,179,737 to £111,809,368 representing a difference of £4,629,631. The consequence of this was that it changed appraisal A – 2018 Residential Pricing to negative £1,155,982 and Appraisal B – 2017 residential pricing (less HPI) reduced to £ 3,111,251. This still represents a £20m disparity approximately with the appellant’s viability conclusions. It nonetheless reduced the margin of surplus on the Council’s assessment to fall within an acceptable margin of error“.
Where would we be without the ability properly to test evidence at inquiry?
Simon Ricketts, 25 January 2020
PS not to be too London-centric, I should add that on the same day the Secretary of State also allowed an appeal for 850 homes near Tewkesbury.
The appeal stats for 2020 are already going to look more healthy than those for the last two years, which become apparent if you interrogate our Town Legal 2014-2019 housing inquiry appeals data visualisation tool.
Author simonicityPosted on January 25, 2020 January 25, 2020 Categories Affordable housing, Costs, Housing, London, ViabilityTags planning appeals;Leave a comment on Jenrick Allows Two Further Large London Appeals, With Costs
As with blog posts, it is helpful for legislation to have a snappy title.
The United Nations Economic Commission for Europe’s Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters is therefore better known as the Aarhus Convention, after the city in Denmark where it was signed on 25 June 1998.
It currently has 47 parties. The UK ratified it in February 2005, as did the EU.
The Convention has three pillars:
⁃	access to information
⁃	public participation in decision making
⁃	access to justice
You will know that the Aarhus Convention requires that access to justice in environmental matters should be “be fair, equitable, timely and not prohibitively expensive”, a challenging requirement in jurisdictions such as ours where access to justice in environmental matters frequently relies upon access to the High Court and appellate courts thereafter, and where processes are almost by definition prohibitively expensive – not just your own lawyers’ costs (cough) but, if the dice roll the wrong way, your liability for those of the defendant authority.
I last properly blogged on Parliament’s, and the English courts system’s, response to that challenge in my blog post dated 11 March 2017, Aarhus: Caps In The Air Again.
I agreed to speak on this subject at the Kingsland Conference event at King’s College London arranged for this Tuesday to mark the 21st anniversary of the signing of the Convention. If this post whets your appetite to hear that day from much more knowledgeable people than me on every aspect of the Convention’s three pillars, then do sign up.
In itself, the Convention has no direct effect in domestic law and its enforcement is indirect, at member state level via meetings of the parties to the Convention and non-binding communications by the Aarhus Convention Compliance Committee. I say “in itself” because it does have direct effect in domestic law via specific EU directives in relation to environmental protection, which was the basis for the European Court of Justice’s preliminary ruling in Edwards (CJEU, 11 April 2013).
At the time of my March 2017 blog post the Civil Procedure (Amendment) Rules 2017 had just come into force, which tightened up the regime in various ways.
The claimant’s default cap against exposure to the defendant’s legal costs in an Aarhus Convention claim) is still £5k where the claimant is an individual and otherwise £10k, with the default cap on how much the claimant can claim if successful still capped at £35k. The caps apply to each party where there are multiple claimants or multiple defendants.
An Aarhus Convention claim is basically defined as a claim brought by a member of the public, challenging the legality of a decision on grounds which concern environmental matters as defined in Articles 9 (1), (2) and (3) or the Convention, whether the claim is by judicial review, or under two specific forms of statutory review:
⁃	section 289 of the Town and Country Planning Act 1990 (challenges to decisions in relation to enforcement notice appeals)
⁃	section 65 of the Town and Country Planning (Listed Buildings and Conservation Areas) Act 1990 ((challenges to decisions in relation to listed building enforcement notice appeals)
The 2017 changes introduced the requirement that, where a claimant brings a claim and is seeking Aarhus costs protection it must say so on the claim form and must file a schedule of financial resources. The court may remove or vary the cap in these circumstances if satisfied that “to do so would not make the costs of the proceedings prohibitively expensive for the claimant“.
Proceedings are to be considered prohibitively expensive 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 –
(vi) whether the claim is frivolous“.
Where the court considers the financial resources of the claimant, “it must have regard to any financial support which any person has provided or is likely to provide to the claimant”.
Three aspects of the 2017 rule amendments were challenged by the the RSPB, Friends of the Earth and ClientEarth in R (RSPB) v Secretary of State for Justice (Dove J, 15 September 2017):
1.	The ability for the court to vary costs caps at any stage in the litigation would not meet the EU law requirement for “reasonable predictability”
2.	No express provision for hearings to be in private when a claimant or a third party supporter’s financial details may be discussed and examined.
3.	Uncertainty as to whether the claimant’s own costs of bringing the litigation should be included in any assessment of their financial resources.
Dove J’s judgment is essential reading for an understanding of the background to costs capping in environmental matters, including the domestic and CJEU authorities.
He found against the claimants on the first ground but the issue was addressed in any event by Parliament in the Civil Procedure (Amendment) Rules 2018 which tightened up the procedural rules to make it clear that, save where there is a significant change in circumstances, variation of the caps can only be considered by the court if either the applicant had so requested in his claim form or if the defendant had so requested in his acknowledgement of service.
He found for the claimants on the second ground and the rules have again been changed to specify that hearings in relation to examination of claimants’ financial details must be heard in private.
He found that it was unnecessary to make a formal declaration to deal with the third ground but considered that it was clear that the court may indeed take account of a claimant’s reasonable costs in determining whether proceedings are “prohibitively expensive“.
The 2017 rule amendments defined “environmental matters” by reference to matters falling within the scope of Article 9 (1) to (3) of the Convention. I had wrongly assumed in my previous blog that the effect might be to limit the scope of the procedure but that has not been the case, following the broad meaning given by the Court of Appeal in Secretary of State v Venn (Court of Appeal, 27 November 2014).
I had also wondered whether the reference to “members of the public” in the amended rules might exclude parish councils from seeking Aarhus costs protection, but that assumption may also have been misplaced. At the permission stage of Crondall Parish Council v Secretary of State (Dove J, 14 May 2019), deputy judge John Howell QC accepted that the parish council was indeed a “member of the public”.
The 2017 rule amendments do not extend the automatic costs capping process to the Court of Appeal and beyond. It will be for the appellate court to consider whether the costs of the appeal proceedings will be prohibitively expensive for a party which was a claimant (with no guidance as to how the costs of previous stages in the litigation are to be taken into account).
The UK is still under some international pressure as to its approach to compliance. In its September 2017 decision VI/8k, the Economic Commission for Europe noted that “while the 2017 amendments to the cost protection system in England and Wales introduced some positive improvements, the 2017 amendments overall appear to have moved [the UK] further away from meeting the requirements of its 2014 decision V/9n, namely that the UK should:
“(a) Further review its system for allocating costs in all court procedures subject to article 9, and undertake practical and legislative measures to ensure that the allocation of costs in all such cases is fair and equitable and not prohibitively expensive;
(b) Further consider the establishment of appropriate assistance mechanisms to remove or reduce financial barriers to access to justice;
(d) Put in place the necessary legislative, regulatory and other measures to establish a clear, transparent and consistent framework to implement article 9, paragraph 4, of the Convention”.
Furthermore, “by failing to ensure that private nuisance proceedings within the scope of article 9, paragraph 3, of the Convention, and for which there is no fully adequate alternative procedure, are not prohibitively expensive, the Party concerned fails to comply with article 9, paragraph 4, of the Convention“.
There is also a complaint which is being investigated by the Aarhus Convention Compliance Committee. It is based on (1) the exclusion from current system of automatic costs capping for section 288 challenges of planning appeal decisions and (2) the risk of public disclosure of claimants’ financial means.
The complainant sets out the position as follows:
“In 2008 a property developer sought to obtain planning permission to build an estate of 18 houses in open countryside outside of Ashover, Derbyshire. Permission to carry out this development was refused. The developer then reapplied for planning permission to develop 26 houses in 2014 and again in 2015. These applications were both refused. An appeal was made against the most recent decision and an Inspector was appointed by the Secretary of State for Communities and Local Government to hear the evidence and make a recommendation to the Secretary of State. After hearing all evidence over a four-day period and visiting the site the Inspector recommended that the appeal be dismissed and planning permission be refused. The Secretary of State disagreed with his Inspector’s recommendation, allowed the appeal, and granted planning permission.
Objectors to the development sought a legal opinion on challenging the Secretary of State’s decision. It was the opinion of counsel that challenging the Secretary of State’s decision would be extremely costly and could fail. The costs protection regime for “Aarhus claims” would not be available for challenges to decisions of the Secretary of State even though the only difference rendering it inapplicable was the identity of the decision-maker. As a result of the uncertainty as to costs no member of the public had the appetite to challenge the decision.
We have been made aware that amendments were made to Part 45 Section VII of England and Wales’ Civil Procedure Rules (“CPR”) (“The 2017 Amendments”) on 28th February 2017. These mean that any claimant or a third party supporter of a claim now risks public disclosure of their financial means.”
DEFRA’s response dated 8 March 2019 is interesting:
1.	Section 288 challenges will be brought within the scope of the rules later this year.
2.	The new Civil Procedure (Amendment) Rules 2019 change the criteria as to when a hearing will be held in private but one of the criteria is whether “it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality“.
There do remain various open questions, for instance:
1.	Post-Brexit, how will we see the Government flesh out the principle outlined in the draft Environment (Principles and Governance) Bill of “access to justice in relation to environmental matters“?
2.	Does the current process give claimants “reasonable predictability“?
2.	What are the practical risks for a defendant, in terms of potentially thereby elongating proceedings, in seeking to vary or remove a costs cap?
3.	What effects are the changes having in practice on potential claimants as well as third party funders?
4.	Where there is no Aarhus costs protection, are we going to see more applications for security for costs by defendants: the £250,000 required of Heathrow Hub Limited for example in the recent Heathrow proceedings (to be heard in the Court of Appeal in November) or the £60,000 required of the claimant in We Love Hackney v London Borough of Hackney (Farbey J, 17 April 2019).
Happy birthday, Aarhus Convention. Let them eat cake?
Simon Ricketts, 22 June 2019
Author simonicityPosted on June 22, 2019 Categories Aarhus Convention, Costs, Judicial reviewLeave a comment on No Time To Be 21: Where Are We With Aarhus Costs Protection?
Author simonicityPosted on May 4, 2019 May 4, 2019 Categories Aarhus Convention, Air quality, Airports, Aviation, Costs, Expert evidence, Habitats, Infrastructure, Judicial review, Parliamentary, Strategic environmental assessmentTags Airports; NPS2 Comments on Lessons From The Heathrow Cases
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.
(i) the situation of the parties; (ii) whether the claimant has a reasonable prospect of success;
(v) the complexity of the relevant law and procedure;and
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
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.
Author simonicityPosted on March 11, 2017 March 11, 2017 Categories Aarhus Convention, Costs, Judicial reviewLeave a comment on Aarhus: Caps In The Air Again
Mending Aarhus
On 1 April 2013 the Government changed the Civil Procedure Rules to introduce a system of automatic costs capping for judicial reviews in England and Wales in relation to “environmental matters” (a broad definition that embraces many “planning” JRs). This was to seek to comply with the Aarhus Convention’s principle that access to environmental justice should not be prohibitively expensive. However, surprise surprise, in some ways arguably the Government went further than was necessary and in other ways it didn’t go far enough.
What the system did was to allow claimants to opt for mutual cost capping when bringing a claim. If the claimant ultimately lost, as an individual (however well-resourced) his or her exposure to the successful defendant’s costs would then be capped at £5k and if a company or other body (however well-resourced) its exposure would be capped at £10k. As a quid pro quo, if the claimant won it could only recover up to £35k. The system only applies at first instance – further applications to the court for specific costs protection are required if the case then goes onto the Court of Appeal and beyond to the Supreme Court
The Government brought in the new system ahead of the CJEU giving judgment in Case C 530/11 European Commission v United Kingdom of Great Britain and Northern Ireland (13 February 2014). The CJEU did not address the post 1 April 2013 system but found that the previous regime was indeed non-compliant. Whilst the new system has addressed most of the CJEU’s criticisms, there are certainly still gaps, for example the current restriction of automatic cost capping to judicial review rather than statutory challenges (for instance to appeal decisions by the Secretary of State and inspectors) and the way in which automatic cost capping only applies at first instance.
The Government consulted in 2015 on proposals to amend the automatic cost capping system, partly to seek to comply with the CJEU ruling and partly to tighten up on the process where it could. Particularly contentious elements included proposing that claimants should submit a schedule of their financial resources when commencing the proceedings so as to allow for argument as to whether the cap should be increased in the particular case, a proposal that cost capping should only be confirmed once a claim had received permission to proceed to a full hearing (ie had been ruled to be arguable) and a proposal to double the standard caps to £10,000 (for individuals) and £20,000 for all other categories of claimant.
The Government has now published on 18 November 2016 Costs Protection In Environmental Claims, its response to that consultation document.
It has stepped back from the more contentious proposals. In summary it proposes that the Civil Procedure Rules be amended to:
– extend Aarhus cost capping to statutory challenges engaging EU law based statutes (this would bring to an end the nonsense of the current Venn litigation saga, in which the refusals of first Ouseley J on 15 August 2016 and then Lewison LJ on 3 November 2016 to grant permission for Ms Venn to appeal are worth a read – further background in this Landmark Chambers update).
– give more certainty that there will be costs protection in Court of Appeal cases “where this is necessary to prevent the proceedings from being prohibitively expensive for the claimant”. The Government will invite the Supreme Court to set equivalent rules to apply to appeals that it hears. So not an automatic system for appeals but clearer guidance.
– refine a definition of “members of the public” who are entitled to Aarhus cost capping. I take this as code for removing the ability for local authority claimants to obtain automatic Aarhus cost capping protection, subject to the outcome of the Aarhus Convention Compliance Committee’s consideration as to whether Hillingdon Council, and other local authorities engaged in the judicial review of the Government’s decision to proceed with HS2, qualify for protection under the Convention (following the ruling of the Court of Appeal on 11 March 2015 that they do under the Civil Procedure Rules – which may have been drawn unnecessarily widely).
– allow parties to make applications to reduce or increase the caps in particular cases. The test will be that the costs of proceedings must “neither be subjectively prohibitively expensive (they must not exceed the financial resources of the claimant) nor appear to be objectively unreasonable” (ie that set out by the CJEU in C-260/11 Edwards v Environment Agency (11 April 2013). To make its case, the claimant would need to “provide information on significant assets, income, liabilities and expenditure. This information would take account of any third-party funding which the claimant had received”.
– clarify that where there are multiple claimants, a separate cap applies to each claimant (reflecting incidentally the approach recently taken in R (Birchall Gardens LLP and Tarmac Trading Limited) v Hertfordshire County Council (Holgate J, 4 November 2016)).
The Government does not intend to extend the Aarhus cost capping system to private nuisance cases (the subject of proceedings currently before the European Court of Human Rights: 39714/15 Austin v. UK) or similar non public law cases that raise environmental issues. Nor does it intend to increase the standard caps or to delay cost capping to beyond the permission stage.
James Maurici QC has prepared a useful comparative table of the proposals in the consultation paper and those in the response document.
Whilst the Government seeks to limit the circumstances in which parties can apply to vary costs caps, stressing the risk of costs orders against parties that do so unreasonably, undoubtedly this will lead to additional pre-hearing sparring and uncertainty (which is not to criticise the proposal – it has sometimes been galling to see claimants obtain automatic costs protection at the standard level, when the claimants’ means may be at least equal that of the cash-strapped defendant authority).
In my view the response document seeks to achieve a sensible and reasonable balance and for that reason will no doubt come under attack from all quarters…
Simon Ricketts 19.11.16
Author simonicityPosted on November 19, 2016 November 19, 2016 Categories Aarhus Convention, Costs, Judicial review, Uncategorized1 Comment on Mending Aarhus