Protective Costs Orders

For a number of years, the UK has faced repeated and fundamental challenges to its lack of provision for cost protection for claimants in public and private law cases and to provide access to justice which is “not prohibitively expensive” (see for example R (on the application of Edwards and another (Appellant)) v Environment Agency and others (Respondents) (No 2) [2013] -  reported in the January 2014 edition of ELM, page 1). Consequently, in April 2013, the Civil Procedure Rules (CPR) were amended to incorporate the standard costs cap for “Aarhus Claims” or environmental judicial reviews. If the claimant loses, his costs will be capped at either £5, 000 or £10, 000. If the Defendant loses, it is capped at £35, 000. 

On the face of it, the changes to the CPR cover only public law challenges – i.e. where a public authority decision is being challenged – and not  private nuisance claims. Where there is no insurance available to provide indemnity for claimants pursuing a nuisance claim, the only other option is to issue proceedings and then apply for a protective costs order (PCO). 

To what extent a PCO is available to claimants in a private nuisance case fell to be considered last month in Austin v Miller Argent.

Austin v Miller Argent: background 

To the East of Merthyr Tydfil is  an open cast coal mine, Ffos-y-Fran, the site of a project to use the profits from recovery of coal deposits to pay for land reclamation of the same site. The scheme has been controversial, attracting much local opposition due to dust and noise pollution.  The claimant in this case – Mrs Argent – who lives under half a kilometre from the site, issued a claim in private nuisance  against the Miller Argent.  Given the potential exposure to the defendant’s costs if she lost the case, Mrs Argent applied for a PCO at the High Court 

The judge at the High Court was not persuaded that Mrs Austin’s claim – if successful -  would have a wider public benefit and so did not merit a PCO. The judge therefore refused to grant a PCO but  gave permission to appeal to the Court of Appeal.

Austin v Miller Argent at the Court of Appeal

Elias LJ delivered the combined judgment. Central to the reasoning of the judgment was a consideration of whether private nuisance cases fell under the UNECE Convention on Access to Information, Public Participation in Decision Making and Access to Justice “(Aarhus Convention”)  - ratified by the UK in 2005.

The crucial Articles 9.2- 9-4, within the “Access to Justice” pillar of the convention, are as follows: 

9. 2. Each Party shall, within the framework of its national legislation, ensure that members of the public concerned

(a) Having a sufficient interest or, alternatively,

(b) Maintaining impairment of a right, where the administrative procedural law of a Party requires this as a precondition,


Have access to a review procedure before a court of law and/or another independent and impartial body established by law, to challenge the substantive and procedural legality of any decision, act or omission subject to the provisions of article 6 and, where so provided for under national law and without prejudice to paragraph 3 below, of other relevant provisions of this Convention.

9.3 . In addition and without prejudice to the review procedures referred to in paragraphs 1 and 2 above, each Party shall ensure that, where they meet the criteria, if any, laid down in its national law, members of the public have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relating to the environment.

9. 4. In addition and without prejudice to paragraph 1 above, the procedures referred to in paragraphs 1, 2 and 3 above shall provide adequate and effective remedies, including injunctive relief as appropriate, and be fair, equitable, timely and not prohibitively expensive. Decisions under this article shall be given or recorded in writing. Decisions of courts, and whenever possible of other bodies, shall be publicly accessible.

Article 9.2 obviously has a narrow public law application, but 9.3 requires “access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relation to the environment.” This was important for Mrs Austin because if a private nuisance action falls under 9.3,  pursuant to Article 9.4, the claimant should benefit from costs protection to ensure that access to justice is “not prohibitively expensive.

Aarhus and private law actions

The Lords of Appeal considered Morgan and Baker v Hinton Organics (Wessex) Limited and CAJE [2009] EWCA Civ 107 – a case involving an action against the operators of a waste management plant where the claimants had argued that 9.3 applied to private nuisance cases.

In Morgan, Carnwath LJ (as he then was) observed that

“the “public” as defined may be a single natural person, and the proceedings may be in respect of acts or omissions of “ private persons”. We doubt in any event whether there it is  helpful in practice to draw such a clear distinction. In the present case, the claimants’ action is no doubt primarily directed to the protection of their own private rights, but the nuisance, if it exists, affects the whole locality. The public aspect is underlined by the interest of the Agency and the Council...”

Although Carnwath left the door open for the possibility that 9.3 could cover private nuisance cases., the respondent  in Austin argued at the Court of Appeal that private nuisance was not covered by 9.3. That is because private nuisance actions are fundamentally about the protection of private property and private property rights. Here, for instance, Mrs Argent claimed that there had been interference with the enjoyment of her property– which is the basis of private nuisance. 

Additionally, the respondent argued, there were other avenues open to Mrs Austin: she could have complained to the authorities about the alleged breaches of environmental permits; enforcement action could follow by the relevant authorities. If the authority then failed to act, it could be judicially reviewed. Alternatively, if the alleged pollution constituted  a statutory nuisance, then the local authority would need to investigate and serve an abatement notice. Again, if the authority failed to act, it could be open in some circumstances to judicial review. This demonstrated that there were alternative procedures available – so Article 9.4  was therefore engaged. 

The Lords of Appeal, whilst seeing “the force  of these submissions” said, “it would be wrong to exclude all claims of private nuisance from the scope of Article 9.3, irrespective of the potentially significant public interest in the wider environmental benefits which they may bring if necessary. (para 17)

They continued, 

“it seems to us unrealistic to believe that the powers conferred upon public authorities will suffice to achieve the Convention’s objectives. Public bodies are often understaffed and under resourced and do not have the same direct concerns to uphold environmental standards as do members of the public” (para 18)

“In our judgment, therefore, private nuisance actions are in principle capable of constituting procedures which fall within the scope of Article 9.3. Plainly that is not true in all actions in private nuisance. Some, such as a complaint about damage from tree roots or water leaks from an upstairs flat, will concern only the claimant’s property and have no wider public interest at all. There must be a significant public interest in the action to justify conferring special costs protection on the claimant.” (Para 21)

To fall within the provision, two requirements need to be met:

i) “the nature of the complaint must have a close link with the particular environmental matters regulated by the convention, even although the action in private nuisance does not directly raise them [sic].

ii) “the claim must if successful confer significant public environmental benefits.” (para 22)

Failing these – then the case would not be subject to the protection from prohibitive expense required by Article 9.4.  However, as for the general application of Aarhus to environmental cases, the judges’ view was that: 

“the Article 9.4 obligation is no more than a factor to take into account when deciding whether to grant a PCO. It reinforces the need for the courts to be alive to the wider public interest in safeguarding environmental standards when considering whether or not to grant a PCO.” (para 39) 

Domestic Law and PCOs

The court then went on to consider the rules for PCOs set out in R(Corner House Research) v Secretary of State for trade and Industry [2005] EWCA Civ 192, [2005] 1 WLR 2600 by Lord Phillips. – and in particular, the requirement that the “the applicant has no private interest in the outcome of the case”. . .”

Since Corner House, the rules have been applied “flexibly”. Recently, in R (Marina Litvinenko) v Secretary of State for the Home Department and others [2013] EWHC 3135  the court ruled that a private interest “is a factor to taken into account” but would not rule out a PCO having regard to public interest in a claim. In the present case, the respondents argued that Mrs Austin had a private interest and that she therefore fell outside the Corner House criteria. 

Ruling

The Lords of Appeal ruled that there was insufficient public interest to warrant a PCO.

“having regard to the limited public benefit which this action would achieve, we are not satisfied that it falls within the scope of Article 9.3.” (para 46) 

Additional points were the private interest of Mrs Austin in the outcome, lack of evidence that Mrs Austin had explored the cheaper route of getting the authorities to enforce (which appears to contradict earlier remarks on alternative procedures – see above) and that the defendant was a private body with limited resources. 

Discussion

The case sets a high hurdle in nuisance cases for demonstrating a wider public interest and re-enforces the prejudice that a “private interest” will have in the outcome of a PCO application. Yet Mrs Austin was one of a number of local people who had complained about the continuing issues of dust and noise. 

There are currently at least two “tracks” for costs orders in environmental cases with the fault line lying between public and private law. With “Aarhus” or environmental judicial reviews, the cost cap is automatic – but with other environmental cases including private nuisance such as actions for compensation and injunctions for pollution – an application for a PCO will be necessary – with the risk that a judge may not accept that the case has a sufficiently wider public benefit or that there is a significant private interest. 

The difficulties for claimants do not end there. Some cases look like public law environmental challenges but are not -strictly speaking - judicial reviews. This would include challenges to planning decision by way of statutory appeals under s 288 of the Town and Country Planning Act 1990. Although akin to a judicial review in principle, it would not benefit from the protection afforded by the CPR (see Venn v Secretary of State for Communities and Local Government and others [2013] EWHC 3546 (Admin) and therefore an application for a PCO would be necessary.

Then there are judicial reviews where the campaigners are aiming to prevent damage to the environment, but where the legal arguments centre on non-environmental processes – which, on a strict interpretation, will not be eligible for costs protection under the CPR. That covers, for instance, many planning cases where the challenges are based on the non-environmental technicalities of planning permission decisions, but the end result may be, for instance, the removal of woodland or development on green belt land – which are obviously environmental issues.  

The UK has come under close scrutiny from the Aarhus Compliance Committee as well as the Court of Justice of the European Union. There have been infraction proceedings and judgments which have been clear on the need to make justice in environmental cases accessible to all (see January and February 2014  issues of Environmental Law Monthly).  Radical change will be needed to ensure that there is greater certainty for all environmental cases – both private and public. 

Post Script: Coventry v Lawrence [2014] UKSC 13

Claimants such as Mrs Austin may well be faced with risks of high costs bills if they continue to pursue their claims without costs protection. But the exposure to “adverse costs” is also something which affects both claimant and defendant. 

The recent round in the long saga of Coventry v Lawrence [2014] UKSC 13 demonstrates that costs exposure can also be a serious issue for defendants. After the decision in February this year in the long-running battle between residents and the owners of a speedway (see March 2014 issue of Environmental Law Monthly) the defendants were faced with legal costs of over £600,000. They therefore appealed and in July this year, Lord Neuberger adjourned proceedings to allow an opportunity for the government to address the court on the issue. That is because there is a possibility that the Court may declare that the old costs regime – which applies to on-going cases issued before the regime changed in April last year -  could be in breach of Article 6 of the European Convention on Human Rights. 

Unless greater certainty and proportionality is brought to bear, access to justice and the consequences of defending claims will continue to be a lottery. 

This article was written by Justin Neal, one of our environmental law experts. It was originally published in Environmental Law Monthly in August 2014 and is reproduced here with their permission. 

Call one of our experts free on

0800 028 1943