Changes to environmental claims costs rules allowing judges to vary costs limits

On 28 February 2017, changes to the Civil Procedure Rules (the "CPR") relating to environmental, or Aarhus Convention ("Convention") claims came into effect. The changes give judges in environmental judicial review claims and statutory challenges the ability to vary the previously fixed costs caps or remove them altogether. These changes will allow judges to award costs that take into account the claimant's financial resources.

Key Points

• The changes will allow the judge to vary the existing costs caps or remove them altogether, so long as the change would not make costs of the proceedings prohibitively expensive for the claimant.
• Claimants will be required to provide a schedule of their financial resources when starting an environmental claim, which must include details of financial support any person has provided or is likely to provide in relation to the claim.
• Decision-makers may now be able to recover more of their costs when successful against well-financed claimants.

Background

Both the UK and the EU are parties to the Convention, which requires parties to guarantee rights of access to information, public participation in decision-making and access to justice in environmental matters. In particular, it requires parties to ensure the public have access to a procedure to challenge decisions subject to the public participation procedures (Article 9(2) of the Convention) and contraventions of national law relating to the environment (Article 9(3)) and specifies that those court procedures should not be prohibitively expensive. Previously, this has meant that a claimant's liability for costs if they lose a claim has been capped at £5,000 for individuals and £10,000 for groups. The amount that a successful claimant can claim from a public body has been capped at £35,000.

In 2015, the government published a consultation inviting comments on how to improve the rules relating to costs protection in certain environmental challenges and bring the environmental costs regime in line with recent developments in case law. The government published its response in November 2016. In its response the government stated that it proposed moving away from fixed cost caps and intended to give effect to the Edwards principles (derived from the European Court of Justice decision in C-260/11 and the Supreme Court decision of R (Edwards) v Environment Agency & Others [2011] 1 W.L.R. 79). The Edwards principles set out when costs will be found to be "prohibitively expensive". They include a bipartite test; costs will be considered prohibitively expensive if they either exceed the claimant's financial resources or are objectively unreasonable. This bipartite test is reflected in CPR 45.44(3).

Changes

The Civil Procedure (Amendment) Rules 2017 (the "2017 Amendments") effected the changes set out in the consultation by way of a new CPR 45.41-45.45. These changes:

• expand the definition of an Aarhus convention claim to include a "review under statute" in relation to claims within the scope of Articles 9(1) or 9(2) of the Convention (CPR 45.41(2)(a)(i));
• require claimants to add a schedule of their financial resources when serving the claim form (CPR 45.42(1)(b)); and
• integrate the existing costs caps into the CPR (CPR 45.43).

The changes make clear that in claims with multiple claimants or multiple defendants, the amounts are to apply in relation to each such claimant or defendant individually (CPR 45.43(4)).

The new rules allow judges to vary the amounts in the costs limits so long as doing so would not be prohibitively expensive (CPR 45.44(1-2)) and include guidance on this point (CPR 45.44(3)). CPR 45.44(3) essentially reiterates the Edwards principles, stating that:

(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.

A new CPR 52.19A also provides for the Court of Appeal to limit the recoverable costs of an appeal in an Aarhus Convention claim, but does not contain any guidance on how it might do so.

Comment

Although the 2017 Amendments open up the possibility of higher costs liabilities for claimants following unsuccessful challenges, it remains to be seen whether this will give rise to an increase in costs in practice as much will depend on how judges exercise their new discretion. The immediate result of the changes will be that claimants will no longer enjoy the certainty of capped costs when making environmental claims in judicial review.

The addition of the requirement to disclose financial resources adds another documentation requirement prior to launching an Aarhus claim, and may discourage the bringing of claims by non-governmental organisations, particularly if a claim is backed by individual donors.

There is also now less certainty around the definition of an "Aarhus claim", which has been extended to include not only judicial reviews but also any "review under statute" which challenges the legality of any decision, act or omission of a body exercising public functions, and which is within the scope of Articles 9(1) or 9(2) of the Convention.

It is also worth noting that three non-governmental organisations, ClientEarth, Friends of the Earth and the RSPB, are challenging the new rules.

Andrew Lidbetter Partner +44 20 7466 2066 Email	Matthew White Partner +44 20 7466 2461	Catherine Howard  Partner +44 20 7466 2858	Jasveer Randhawa Of Counsel +44 20 7466 2998 Email