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Supreme Court give Edwards costs judgment

The Supreme Court (Lord Neuberger (President), Lord Hope, Lord Mance, Lord Clarke, Lord Carnwath) today gave judgment in R (Edwards) v Environment Agency (No 2) [2013] UKSC 78.

The following text comes from the Supreme Court press summary:

This appeal concerns the meaning of "prohibitively expensive" under the Aarhus Convention.
The proceedings concerned a cement works in Rugby. On 12 August 2003, the Environment Agency issued a permit to continue operations with an alteration in its fuel from coal and petroleum coke to shredded tyres. This proposal gave rise to a public campaign on environmental grounds. The public campaign was being led by Mrs Pallikaropolous who had committed substantial funds of her own to the campaign.
Following the decision of the Rugby Borough Council not to pursue its own claim for judicial review, Mrs Pallikaropolous was reported as "pledging to carry on the battle using legal aid" and, because she was too rich to get legal aid, asked for someone to come forward to take the case under legal aid. A local resident, Mr David Edwards, began judicial review proceedings on 28 October 2003 challenging the Agency’s decision. The judge inferred that Mr David Edwards had been put up as a claimant in order to secure public funding of the claim.
The substantive application for judicial review was dismissed on 8 February 2006. Mr Edwards appealed to the Court of Appeal. On the final day of the Court of Appeal hearing, Mr Edwards withdrew his instructions from both solicitors and counsel. Mrs Pallikaropolous applied without objection to be joined as an additional appellant in the public interest to enable the appeal to be concluded. Her potential liability to costs in the Court of Appeal was capped at £2,000. Following dismissal of the appeal, the respondents’ costs capped at this level were awarded against her.
Mrs Pallikaropolous was given leave to appeal by the House of Lords. She provided security for costs in the sum of £25,000 and the appeal proceeded. Her appeal was dismissed by the House of Lords. The present dispute arises out of the order for costs of the appeal in the House of Lords made in favour of the respondents. The Environment Agency and the Secretary of State submitted bills totally respectively £55,810 and £32,290.
The Supreme Court made a reference to the Court of Justice of the European Union (CJEU) for guidance relating to the expression "not prohibitively expensive". While the reference was pending, the government issued a consultation paper on the issue of cost capping and the scope for providing clearer guidance in the procedural rules. The proposals were given effect to by amendment to the Civil Procedure Rules.

The Supreme Court makes an order for costs in the amount of £25,000 in favour of the respondents jointly. Lord Carnwath gives the lead judgment with which Lord Neuberger, Lord Hope, Lord Mance and Lord Clarke agree.

The following points could be extracted from the CJEU’s Edwards judgment: (i) The test is not purely subjective. The cost of proceedings must not exceed the financial resources of the person concerned nor appear to be objectively unreasonable, at least in certain cases. (ii) The court did not give definitive guidance as to how to assess what is objectively unreasonable. (iii) The court could take into account the merits of the case: that is "whether the claimant has a reasonable prospect of success, the importance of what is at stake for the claimant and for the protection of the environment, the complexity of the relevant law and procedure, the potentially frivolous nature of the claim at its various stages." (4)That the claimant has not in fact been deterred for carrying on the proceedings is not itself determinative. (5) The same criteria are to be applied on appeal as at first instance [28].
The respondents are not now seeking recovery of their full costs. They have agreed to limit their joint claim to £25,000 which is the amount of security already paid by the appellant as the condition for bringing the appeal. It is impossible on the material available to hold that the order was subjectively unreasonable. The more difficult question is whether there should be some objectively determined lower limit, and if so how it should be assessed. Although this was one of the main issues raised by the reference, the European court has not offered a simple or straightforward answer [30-31].
Of the five factors mentioned by the court, the second and fifth can be discounted immediately. There is no evidence that the appellant had any economic interest of her own in the proceedings and, given the grant of permission at each stage, they could not be said to be frivolous [34]. The relative complexity of the case is evidenced by the fact that it took three days before the House [35]. The other two factors – (i) the prospects of success and (iii) the importance of the case for the protection of the environment – are at best neutral from the applicant’s point of view [36].
Taking factors mentioned by the court into account, it is impossible to say that the figure of £25,000, viewed objectively, is unreasonably high, either on its own or in conjunction with the £2,000 awarded in the Court of Appeal [37].

James Maurici QC (with James Eadie QC) appeared for the Respondents (Charles Banner also acted for the Respondents but did not appear in the Supreme Court).