“Who will speak for the trees?” — MoJ “Costs Protection in Environmental Claims” consultation

lone tree in mist

“The Lorax: Which way does a tree fall?

The Once-ler: Uh, down?

The Lorax: A tree falls the way it leans. Be careful which way you lean.”

The Ministry of Justice (MoJ) recently launched its consultation on reforms to the costs-capping rules in environmental challenges. In this post we consider the changes being put forward and what they may mean for the future of environmental litigation.

What prompted these reforms?

Three main factors appear to have sparked the touchpaper for this latest round of reforms.

  1. According to the consultation paper, there remains scope for greater clarity and certainty following both domestic and European judgments[1] that the pre-2013 environmental costs regime failed to satisfy the ‘not prohibitively expensive’ requirement of the Public Participation Directive or the Aarhus Convention.
  1. There have been continued Government efforts to tackle the ‘growth in unmeritorious judicial review’, most recently in funding.
  1. The headlines of the delayed implementation of several major infrastructure projects arising from legal challenges with HS2, London Garden Bridge, and Hinkley Point C nuclear power station to name but a few.

What is being proposed?

The proposals fall into four main areas:

  • the scope of the regime in terms of the types of cases that are eligible for costs protection and whether the regime should be extended to apply to certain reviews under statute;
  • the types of claimant eligible for costs protection;
  • the levels of costs protection available and whether they should remain fixed or should be variable; and
  • the factors which courts consider when deciding whether cross-undertakings in damages for interim injunctions are required in cases which fall within the scope of the regime.

Scope

‘Aarhus Convention claims’ (judicial review claims made under the Aarhus Convention’s provisions) are eligible under Civil Procedure Rules (CPR) 45.41(2) for the Environmental Costs Protection Regime (ECPR).

The proposals suggest amending Practice Direction (PD) 52D to include specific statutory reviews in Aarhus Convention claims. This means appeals against enforcement decisions relating to unauthorised development under sections 289(1) and (2) Town Country Planning Act and section 65(1) of the Planning (Listed Buildings Conservation Areas) Act 1990 would be eligible for the ECPR, dependent on their subject matter.

Claimants

The proposals suggest amending CPR 45.43 so that only a claimant who is a ‘member of the public’ can be entitled to costs protection. This would exclude proceedings brought by public authorities from the scope of the ECPR. In addition, the proposals float the idea that costs protection should only be granted once permission to apply for judicial or statutory review (where relevant) has been given.

Levels of costs protection

This is where the most significant changes are proposed. Among them are:

  • A requirement for claimants to file and serve a schedule of their financial resources with their claim form, which includes details of any financial support from others;
  • Increasing the current caps for individual claimants and other claimants respectively to £10,000 and £20,000;
  • Reducing the cap for defendants to £25,000;
  • A separate costs cap for each individual party in cases with multiple claimants or defendants;
  • Giving courts the power to vary or remove any caps in appropriate cases (so long as any variation is in line with the Edwards principles, and not make the costs ‘prohibitively expensive’); and
  • Changing the assessment of costs for defendants who challenge a claimant’s ECPR eligibility from indemnity to standard basis.

Factors for cross-undertakings in damages

Three amendments are proposed to PD25A. These are:

  • for courts to apply the Edwards principles, when considering if continuing with proceedings would be ‘prohibitively expensive’;
  • to take into account the combined financial resources of claimants in a multi-claimant case;
  • and to clarify that the provisions relating to cross-undertakings in damages in Aarhus Convention claims apply only to an applicant for an interim injunction who is a member of the public.

Comments

In Dr Seuss’ children’s tale, the titular ‘Lorax’ who ‘speaks for the trees’ warns the Once-ler of the environmental consequences that a preoccupation with industry and economic growth may lead to.

Although the changes extend the scope of ECPR beyond judicial reviews, other potential restrictions on claimants are worrying. There is substantially increased financial scrutiny and burden on claimants. The paper expressly acknowledges that this could deter claimants from bringing a claim. Environmental activist groups have already expressed concerns which have not gone unnoticed by the Aarhus Clearinghouse newsroom.

The Government’s proposed ‘measured adjustments’ to the ECPR are unsurprising, in light of other policy developments and goals. The changes are intended to disincentivize ‘unmeritorious challenges to cause delay’ and so equalise the ‘uneven playing field’ for defendants.

This overlooks the fact that, in environmental litigation, there is often an imbalance of resources between claimants (typically members of the public or campaign groups) and defendants (typically a development company or government agency) from the outset. The proposals do little to quell this disparity and instead create real disincentives against members of the public pursuing Aarhus claims. If the reforms go through as currently drafted, there may be fewer voices willing or able to speak for the trees.

[1] Edwards v. Environment Agency (case C-260/11 [2013] and subsequent [2013] UKSC 78) and European Commission v. United Kingdom (case C-530/11; [2014] 3 WLR 853)

Filed Under: Environment

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