The issue of costs in environmental litigation is a very live issue at the moment, following the Court of Appeal’s judgment in R (Garner) v. Elmbridge Borough Council  EWCA Civ 1006;  1 Costs L.R. 48 and the Supreme Court’s decision in R (Edwards) v. Environment Agency & Others  1 W.L.R. 79 – together with the Supreme Court’s reference for a preliminary ruling to the CJEU. See also R (Coedbach Action Group) v. Secretary of State for Climate Change and Energy EWHC 2312. There seems little doubt that costs in these cases will undergo a significant transformation in the near future, not least because the costs culture in the national courts is so different from that prevailing in Europe and in the light of moves to reform costs here following the Sullivan and Jackson reports.
In Garner, Sullivan LJ held that:
- the principles for protective costs orders in R (Corner House Research) v. Secretary of State for Trade and Industry 1 WLR 2600 were settled, but the Court of Appeal had not had to consider whether those principles complied with the requirements of Article 10a ;
- the EIA Directive was directly effective and could require modification of the costs rules in English law ;
- the impugned planning permission was for EIA development therefore Article 10a was applicable. Accordingly it was necessary to modify the Corner House principles, but only in so far as necessary to secure compliance with the Directive ;
- the requirement to show that the case was one of general public importance, or that the public interest required resolution of the issue, was not compatible with the Aarhus Convention or the Directive because these were based on the premise that it was in the public interest that there should be effective public participation in cases involving environmental impact assessment ;
- the case raised an important point of principle, namely whether an objective or subjective test should be applied when determining whether or not the procedure was prohibitively expensive (i.e. whether the court should decide by reference to the costs that an “ordinary” member of the public would be able to pay, or by reference to the means of the particular claimant –or a combination of the two). Sullivan LJ, did not decide what the precise test should be, but he held that Nichol J had been wrong to apply a purely subjective test because this would frustrate the intention of the directive . Moreover, a purely subjective test requiring the claimant to disclose publicly his personal financial circumstances might have a chilling effect on the willingness of ordinary members of the public to challenge environmental decisions -;
- the costs in the present case of £60,000 plus VAT would be prohibitively expensive because they would deter most ordinary members of the public given that they were twice the gross national average wage of £25,500 pa ;
- a claimant wishing to obtain a PCO cannot have it both ways and expect not to pay costs if he loses and yet have unlimited recovery should he win . A reciprocal costs would not necessarily be inconsistent with Article 10a, but whether to impose one should be decided on a case-by-case basis .
The effect of the Court of Appeal’s decision in Garner is to modify the Corner House conditions when considering whether to make a PCO in environmental cases where Article 10a of Directive 85/337/EEC is engaged by:
- Disapplying the requirement to show that the issues raised are of general public importance and/or that the public interest requires that those issues should be resolved; and
- Modifying the requirement to have regard to the financial resources of the applicant and respondent(s) and to the amount of costs that are likely to be involved when considering whether it is fair and just to make the order by applying a test which is not purely subjective.
- However, these modifications to the Corner House principles were made “… only in so far as it is necessary to secure such compliance [with the directive]”: Garner, at . It appears (for the present) that if Article 10a is not engaged the Corner House conditions should be applied in their unmodified form.
In non-EU cases, the rules appear to remain those in Corner House as explained and modified by successive Court of Appeal judgments, subject to any change in the Rules of Court regarding costs: see R. (on the application of Compton) v. Wiltshire Primary Care Trust  1 W.L.R. 1436; R (on the application of Buglife) v. Thurrock Thames Gateway Development Corp  Env. L.R. 18 and Morgan v Hinton Organics (Wessex) Ltd  Env. L.R. 30. This means that there is a distinction between environmental challenges where the EU principles can be invoked and those where it cannot, which seems hard to justify in principle in terms of access to justice.
In Edwards, the Supreme Court, while holding that its costs officers had no jurisdiction to sets costs at nil, held that the issues were a matter for the SC itself and referred to the ECJ the question of what was meant by costs being “prohibitively expensive”. Lord Hope DPSC considered the question of whether this issue should be determined on a subjective or objective basis and continued:
“31 The importance that is to be attached to Sullivan LJ’s observations in R (Garner) v Elmbridge Borough Council gathers strength when they are viewed in the light of the proposal in para 4.5 of Chapter 30 of the Jackson Review of Civil Litigation Costs (December 2009) as to environmental judicial review cases that the costs ordered against the claimant should not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, and the entirely different proposal in para 30 of the Update Report of the Sullivan Working Group (August 2010) that an unsuccessful claimant in a claim for judicial review should not be ordered to pay the costs of any other party other than where the claimant has acted unreasonably in bringing or conducting the proceedings. They have to be viewed too in the light of the conclusion of the Aarhus Convention Compliance Committee which was communicated by letter dated 18 October 2010 that, in legal proceedings in the UK within the scope of article 9 of the Convention, the public interest nature of the environmental claims under consideration does not seem to have been given sufficient consideration in the apportioning of costs by the courts and that despite the various measures available to address prohibitive costs, taken together they do not ensure that the costs remain at a level which meets the requirements of the Convention: see paras 134–135. It is clear that the test which the court must apply to ensure that the proceedings are not prohibitively expensive remains in a state of uncertainty. The balance seems to lie in favour of the objective approach, but this has yet to be finally determined.
32 It is unclear too whether a different approach is permissible at the stage of a second appeal from that which requires to be taken at first instance. The question in R (Garner) v Elmbridge Borough Council was about the approach that was required to be taken at first instance. In this case Mrs Pallikaropoulos did not appear at first instance. She was given a protective costs order in the Court of Appeal, where her appeal was unsuccessful, because her liability in costs was capped at £2,000. By the stage when her appeal reached the House of Lords the question which she wished to raise had already been considered twice in the courts below without the second claimant having been deterred from seeking judicial review on grounds of expense. It is questionable whether the public interest is best served if a limit must be set on the amount of the costs payable to the successful party in the event of a second appeal as this will inevitably mean that, if the public authority wins, some of the costs reasonably incurred by it will not be recoverable.
33 It is plain from the reasons that were given by the House of Lords for its decision to refuse a protective costs order on 22 March 2007 that these difficult issues were not addressed at that stage. It took a purely subjective approach to the question whether a case for such an order had been made. No reasons were given for the costs order of 18 July 2008. But it is to be inferred from its terms that the House was not satisfied that a case had been made out for any modification of its approach. It must be concluded that here too the House took an approach to this issue which was a purely subjective one. It is to say the least questionable whether in taking this approach, which has now been disapproved by the Court of Appeal in R (Garner) v Elmbridge Borough Council, it fulfilled its obligations under the Directives.”
The Aarhus Compliance Committee has made recent findings which give some guidance as to what size of adverse costs liability will be “prohibitively expensive”. In the Cultra Residents’ Association complaint(ACCC/C/2008/27) in relation to the expansion of Belfast City Airport, the Committee found that an order for the claimant to pay £39,454 following the dismissal of its claim for judicial review was prohibitively expensive. However, in the Morgon complaint (ACCC/2008/23) the Committee held that an adverse costs order of £5,130 was not prohibitively expensive.
For the present, Garner and Edwards establish a largely (but not wholly) objective means test for PCOs which has some undesirable implications, not least the fact that those who can afford to litigate against probably cash-limited public bodies may be placed in an advantageous position. However, how the position is worked out finally remains to be seen but such occurrences may simply be the price to be paid for better access generally to environmental justice unless the CJEU sanctions a more flexible approach to determining what may be “prohibitively expensive”. Other solutions may include the expansion of the jurisdiction of the tribunal system to deal with (presumably more cheaply) a wider range of environmental cases.
In the meantime, the interim position is becoming more interesting. Garner (and Edwards) established a more generous approach to PCOs in cases where the Aarhus principles were applicable through EU directives such as the EIA Directive. However, it is worth recalling that international treaties may be given effect through the EU general principles of law and that the Garner approach may be open to a wider interpretation if Aarhus is applied in that manner.
On 8 March 2011, the CJEU gave judgment in Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky [C-240/09], a case in which the Ministry for the Environment in Slovakia had refused a request by an environmental association, established in accordance with Slovak law, to be a party to administrative proceedings relating to certain derogations from the Habitats Directive. An administrative appeal brought by the association against the refusal had also failed. The association contended that this was in breach of Article 9(3) of the Aarhus Convention, which provides:
“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.”
The CJEU was asked to give a preliminary ruling on whether inter alia the provisions of Article 9(3) had direct effect in EU law. The CJEU held that it did not, but added the following:
“50 It follows that, in so far as concerns a species protected by EU law, and in particular the Habitats Directive, it is for the national court, in order to ensure effective judicial protection in the fields covered by EU environmental law, to interpret its national law in a way which, to the fullest extent possible, is consistent with the objectives laid down in Article 9(3) of the Aarhus Convention.
51 Therefore, it is for the referring court to interpret, to the fullest extent possible, the procedural rules relating to the conditions to be met in order to bring administrative or judicial proceedings in accordance with the objectives of Article 9(3) of the Aarhus Convention and the objective of effective judicial protection of the rights conferred by EU law, so as to enable an environmental protection organisation, such as the zoskupenie, to challenge before a court a decision taken following administrative proceedings liable to be contrary to EU environmental law (see, to that effect, Case C-432/05 Unibet  ECR I-2271, paragraph 44, and Impact, paragraph 54).”
This appears to recognise that the Aarhus Convention, though not directly effective, should be used to construe national procedural provisions as far as possible to give effect to Aarhus principles – in the manner of the principle in Marleasing Case C-106/89  1 C.M.L.R. 30. Whilst this was applied in the specific context of the Habitats Directive, there is no reason in principle why it should not apply in other EU environmental contexts and also in respect of other provisions of the Aarhus Convention – such as the other provisions of Article 9.