Scottish court tries to balance practical considerations with acknowledged unlawfulness in Jackdaw/Rosebank judicial reviews

A Scottish court has confirmed that the consents for the Jackdaw and Rosebank North Sea oil and gas projects should be quashed as being unlawful for failing to assess the environmental effects of downstream emissions. This is in line with the Supreme Court’s landmark ruling in Finch last year (see our blog on Finch here). However, the court has suspended the quashing until the Government/regulator have had a chance to reconsider the consents, to allow the developers flexibility to deal with some of the practical and commercial issues involved in such complex infrastructure projects and avoid the cost and disruption of work having to cease immediately.

Key Points

• The consents were unlawful for failing to assess the effects of emissions from the combustion of oil and gas to be produced, in line with Finch. The starting position was therefore that they should be quashed, reflecting the importance of public authorities acting lawfully.
• The developers' arguments as to time, cost and other practical difficulties associated with stopping work on the complex projects did not justify the court refusing to quash the consents and ordering the decisions to be remade.
• However, the court suspended the effect of the quashing until a reconsideration decision is made, allowing the developers to continue with certain works in the meantime as long as there is no extraction of oil and gas.

Background

Jackdaw and Rosebank are major oil and gas projects in the North Sea which were granted consent to proceed in 2022 and 2023 respectively. Both projects were challenged by judicial review in the Scottish courts and, given the similarity in issues, the cases were dealt with together. The challenges were brought by Greenpeace and Uplift, both NGOs.

By the time of the substantive hearing in November 2024, the parties were all agreed that the consents for the projects were unlawful, as the Environmental Impact Assessments prepared during the application process did not assess the effects of downstream emissions i.e. emissions from the combustion of the oil or gas to be produced (a category of Scope 3 emission). Following the Supreme Court’s landmark judgment in Finch last year, it was apparent that those emissions should have been assessed. The Scottish court of session was bound by the Finch decision and therefore the challenges inevitably had to succeed.

The hearing instead focused on the remedy the court should grant in relation to the acknowledged unlawful decisions, specifically whether the consents should be quashed, in which case they would need to be reconsidered and made again, or whether the court might just grant a declaration of unlawfulness but leave the consents in place such that the projects could continue.

Impact of delay

To that end the developers involved in both projects gave detailed factual evidence to the court as to the progress and plans for their project and what the impact of delay would be.

Jackdaw is a gas field in the Central North Sea, where drilling of four wells started in 2023 and was over half complete by the time of the hearing. The costs incurred so far by the developers run into hundreds of millions of pounds. The developers' evidence explained that stopping work could be done safely but this would be a complex exercise, with limits on what is technically feasible to suspend at what stage, and would result in significant associated cost and delays to the project.

Rosebank is estimated to be the largest undeveloped oil and gas field in the UK continental shelf. Again, significant work and investment has already been undertaken, with drilling scheduled to commence in Q1/Q2 2025. Due to difficulties with availability of specialist equipment, any delay to allow for reconsideration of the consent would not necessarily have a linear impact on the project i.e. a delay of one year in the consent would actually delay the project by at least two years. The evidence before the court also estimated that suspending work at Rosebank could expose several hundred workers to the risk of redundancy.

The judge (Lord Ericht) concluded that the strong arguments put forward by the developers as to the risk to the viability of the projects as a whole and their importance for issues such as energy security and job creation were not matters for him. They went to the substance of whether extraction of oil and gas from these projects should go ahead. The question for the judge was confined to whether the unlawful decisions should be retaken lawfully.

Factors relevant to remedy

Although the legal position on remedies in judicial review is different in Scotland to the position in England, the court has a wide discretion which can extend to refusing a remedy, taking into account a range of factors including the practical effect of 'reduction' (the Scottish equivalent of quashing) and the potential prejudice to public and private interests.

Lord Ericht commented that this had been a material error, in that the decision might have been different if downstream emissions had formed part of the assessment process. The public interest in the rule of law and public authorities acting lawfully was said to be a strong factor in favour of reduction. In addition, the interests of the public, who could then express their views in the consultation stage of the reconsideration process, also weighed strongly in favour of reduction.

These factors had to be weighed against the developers' private interests. The court noted the chronology of the current projects and the progress through the English courts of the Finch case. The consents in both projects were granted after there had been a split decision by the English Court of Appeal in Finch, which the court took to demonstrate that the law on whether downstream emissions should be assessed was uncertain at that time. The court commented that in starting work once consent had been granted, rather than waiting for the law to be settled by the Supreme Court, the developers took on the risk that the consents would be unlawful. The Supreme Court in Finch has stated the correct interpretation of the law, which applies to decisions before that judgment. The mere fact that the judgment post-dates the consents being granted does not of itself justify refusing quashing. Lord Ericht took the view that all the parties knew or ought to have known at the time that the consents were granted that the law was uncertain.

He explained that developers (and investors) cannot proceed with certainty that a decision is lawful unless and until the time limit for bringing judicial review proceedings has expired. Here the challenges were brought within the required time limit. Therefore the developers had no certainty that the decision was lawful and would not be quashed. This was not affected by separate emails from OPRED, the relevant regulator, to two of the developers stating that downstream emissions need not be considered, which were based on their understanding of the law at the time. Ultimately it was the developers’ commercial decision to proceed on risk, which does not justify departing from the normal remedy of quashing an unlawful public law decision.

The court noted that reconsideration of the consents cannot take place for some time because of the current deferral of EIA decisions pending issuing of supplementary EIA guidance by the UK Government in the light of Finch, following its consultation on the issue which closed on 8 January 2025. That guidance is intended to be published in Spring 2025. At present the court accepted there was no consensus on how downstream emissions should be calculated and therefore it was said to be in the interests of good administration that the government properly considers this issue. The delay this will cause to reconsideration was said to be for good reason, and again was not a justification for refusing quashing.

Decision

Ultimately the decisions were ordered to be reduced (quashed) and taken again, this time taking into account downstream emissions.

However, the court understood that these are complex projects and accepted the significant challenges and disruptions that would be caused by requiring work to stop during the period of reconsideration. The quashing was therefore suspended. In practical terms this means the developers can either continue with work as planned, or they can make the projects safe but then take no further action until they know the result of the reconsideration. How to proceed will now be a commercial decision for the developers, in light of the various risks involved, including the risk that the consents will be refused on reconsideration.

However, the court was clear that this suspension would not allow extraction of oil and gas before reconsideration had taken place. The suspension was intended to allow the developers some flexibility on how to deal with practical issues and to continue with preparatory engineering and construction works if they so choose – not to allow them to proceed to extract oil and gas before the required environmental assessment has been done. That was made an explicit condition of the suspension.

Although the court would not set any explicit time requirement on the reconsideration, not wanting to interfere with the process already underway, it did state that it expected a decision to be taken as soon as possible in accordance with the timetable the Government has already announced, under which deferral of EIAs will come to an end in the Spring along with the publication of the new guidance.

The court also clarified that the reduction, or quashing, will have prospective effect only from the date when it ceases to be suspended (when the regulator makes a new decision as to whether or not to grant consent), and will not apply retrospectively to works done during the period of suspension. This was made clear to avoid any doubts about the legality of work done between the granting of consents and reduction.

Comment

These high-profile judicial reviews are an example of the difficulties and uncertainty caused by the Supreme Court's decision in Finch last year and the broader risks of a change in law to ongoing projects. Litigation challenges can cause years of uncertainty and therefore developers often will make the commercial choice to proceed with at least preparatory works, at their own risk. This judgment is a stark reminder that the courts will not be easily persuaded to allow an unlawful decision to stand simply because of the time and cost implications for projects, even where those projects are said to have broader public benefits such as energy security and job creation.

However, the court did heed the developers' evidence as to the complexity of the projects and the difficulties associated with being required to stop work immediately, and indeed to face the risk that work done before a reconsideration decision may be considered unlawful. Lord Ericht's ultimate order was a creative attempt to balance those problems with the need to uphold the rule of law, suspending the effect of the quashing so that whatever work the developers consider appropriate can continue (as long as it is not extraction of oil and gas) and making it prospective in effect only.

The judgment is timely in light of the Government's recent announcement on reforms to judicial review procedures for nationally significant infrastructure projects, aimed at speeding up at least that category of challenges to projects (see more here). This example demonstrates clearly how important it is that judicial review challenges to projects, themselves vital as the means to hold public body decision making to account, are resolved quickly one way or the other.