The Supreme Court Costs Officers (Mrs Registrar Di Mambro and Master O’Hare) today handed down an important judgment in R (Edwards & Pallikaropoulos) v Environment Agency, the First Secretary of State and & the Secretary of State for the Environment Food and Rural Affairs.
The appeal to which the order for costs in issue relates arose out of an application for judicial review seeking to quash a permit issued on 12 August 2003 by the Environment Agency (“the Agency”) for the operation of a cement works in Rugby. The grounds alleged that the Agency did not disclose enough information about the environmental impact of the plant to satisfy its statutory and common law duties of public consultation. The grounds included argument on the provisions contained in Council Directive 96/61/EC concerning integrated pollution prevention and control (“the IPPC Directive”) and Council Directive 85/337/EEC concerning Environmental Impact Assessment (“the EIA Directive”). Those Directives implement provisions of the Aarhus Convention the UNECE Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters: 25 June 1998 requiring that access to environmental justice not be “prohibitively expensive”.
The claim having failed in the High Court and Court of Appeal , Mrs Pallikaropoulos obtained leave to appeal to the House of Lords and made an application to the House of Lords for an order varying or dispensing with the requirement to give security for costs in accordance with House of Lords Practice Direction 10.6 and an application for a protective costs order (“PCO”) seeking to cap her liability for costs on the appeal to the House of Lords to £10,000 (pp. 29 35). The submissions made relied upon the Aarhus Convention and the Public Participation Directive 2003/355/EC amending the EIA and IPPC Directives to include the requirement that access to courts not be “prohibitively expensive” (see p. 34). The applications for waiver of security and a PCO were opposed by the Respondents. By letter dated 22 March 2007 the Judicial Office wrote indicating that the Appeal Committee had rejected the applications for waiver of security and for a PCO. The Appeal Committee determined that it did not consider “the suggested protective costs orders regarding costs appear proportionate on the information which is before them and in the light of the nature of the issues involved; and they do not consider that any case has been made for saying that the proposed appeal would be “prohibitively expensive” or that Directive 2003/35/EC would be breached without a special order”.
The appeal before the Judicial Committee lasted 3 days between 21 and 23 January 2008. On 16 April 2008 the Judicial Committee unanimously affirmed the Court of Appeal’s decision and dismissed the appeal ( UKHL 22;  1 W.L.R. 1587). The issue of costs was adjourned so that the parties could make written representations.
Mrs Pallikaropoulos’ written submissions on costs argued that there should be no order as to costs on the appeal. Those submissions again relied on Directive 2003/355/EC and the Aarhus Convention and the requirement that the procedure not be “prohibitively expensive”.
On 18 July 2008 the House of Lords ordered that Mrs Pallikaropoulos “do pay or cause to be paid to the respondents their costs of the appeal to this House, the amount of such costs to be certified by the Clerk of the Parliaments if not agreed between the parties”.
Correspondence between the parties ensued on the issue of costs. The Agency claimed costs of £55,810, the Secretary of State costs of £32,290.
Mrs Pallikaropoulos then argued at the detailed assessment of the bills costs stage that the Supreme Court’s Costs Officers were required by “(1) the EIA Directive and IPPC Directive; and/or (2) the Aarhus Convention to assess Mrs Pallikaropoulos’ liability for the Secretary of State’s and Environment Agency’s costs here (being the costs of the appeal in the House of Lords) at a level which is not “prohibitively expensive” within the meaning of those legal regimes; which, in the circumstances is nil”. The Supreme Court costs officers on 4 December 2009 held a hearing to determine the following preliminary issues:
i) Where an order for costs has been made, whether, as a general rule, the court assessing those costs has any jurisdiction to implement the IPPC and EIA Directives.
ii) If so, whether, in the particular circumstances of this case, we should seek to implement the EIA and IPPC Directives.
The Supreme Court Costs officers held that their jurisdiction to consider whether costs were “unreasonably incurred” and “unreasonable in amount” (see the Supreme Court Practice Direction 13, para. 16.1) when read in the light of the requirements of the Directives allowed consideration of whether the costs sought were “prohibitively expensive”, and that such a jurisdiction was similar to that conferred under s. 11 of the Access to Justice Act when a party ordered to pay costs has the benefit of LSC funding.
The Supreme Court Costs Officers also held that the test of “prohibitively expensive” they were minded to adopt was that in the Sullivan Report namely: “… costs, actual or risked, should be regarded as “prohibitively expensive” if they would reasonably prevent an “ordinary” member of the public (that is, “one who is neither very rich nor very poor, and would not be entitled to legal aid”) from embarking on the challenge falling within the terms of Aarhus”. They said:
“That seems to us to require us to start by making an objective assessment of what costs are reasonable costs. However, any allowance or disallowance of costs we make must be made in the light of all the circumstances. We presently take the view that we should also have regard to the following:
i) The financial resources of both parties.
ii) Their conduct in connection with the appeal.
iii) The fact that the threat of an adverse costs order did not in fact prohibit the appeal.
iv) The fact that a request to waive security money was refused and security was in fact provided.
v) The amount raised and paid for the Appellant’s own costs”.
The Supreme Court Costs Officers also held that the previous consideration of the Directives and Aarhus by the House of Lords in this case did not prevent their considering these issues again at the assessment stage, they held there was no issue estoppel.
The respondents are seeking to appeal the decision to the Justices in accordance para. 49 of the Supreme Court Rules.
James Maurici appeared for the Respondents.