Joint Opinion on Costs and Funding in Environmental Cases

Joint Opinion on Costs and Funding in Environmental Cases


Stephen Tromans QC, together with Stephen Hockman QC of 6 Pump Court and Gordon Wignall of No. 5 Chambers, instructed jointly by Hugh James and Richard Buxton solicitors, have produced a joint Opinion on the impact of the Aarhus Convention on costs and funding rules in environmental cases.  The Opinion makes the following important points:

  • It is clear from the communication of the Aarhus Compliance Committee in Morgan v. Hinton Organics that the obligations under Articles 9(3) and 9(4) of the Convention apply to private nuisance cases.
  • The Compliance Committee in Client Earth (the Port of Tyne case) in 2009 found the UK to be in systemic breach of Article 9(4), which requires the provision of adequate and effective remedies, which are “fair, equitable, timely and not prohibitively expensive”. The UK was recommended to review its cost rules and take action to rectify the breach.
  • Lord Justice Jackson’s recommendation for qualified one-way costs shifting (QUOCS) in judicial review cases fails to go far enough to ensure the UK is compliant with its Aarhus obligations in private nuisance cases where these concern environmental issues.  Lord Justice Jackson recognised that if the rules on costs in private nuisance claims amounted to a breach of the Aarhus obligations then the answer lay in extending QUOCS to such cases.
  • The Government’s chosen course is to repeal the legislation allowing recovery of CFA uplifts and ATE insurance premiums in such cases, without ensuring that other means are in place to avoid recourse to the courts being prohibitively expensive. The UK’s piecemeal approach to costs and funding rules does not lend itself to a coherent approach to compliance with the Convention: in particular it cannot provide certainty as to exposure for costs before litigation and avoid the risk of prohibitively expensive defendant’s costs – of which there are a number of extreme examples in recent private nuisance proceedings. 
  • The MoJ consultation in October 2011 on costs protection in environmental judicial review cases fails to address private nuisance.
  • It is difficult to see how Parliament can properly withdraw the recovery of uplifts and premiums in such cases, as is proposed in the Legal Aid, Sentencing and Punishment of Offenders Bill, without understanding how the full body of new rules will ensure compliance with Article 9(4).
  • The replacement of the need for ATE and CFA with a QUOCS system for all environmental cases would have a massive positive effect in reducing the cost of litigation and would genuinely encourage participation in matters concerning the environment, as envisaged by Aarhus.

The Opinion was referred to by Lord Thomas of Gresford and others in the House of Lords Committee Debate on the LASPO Bill on 1st February 2012, in proposing amendments to deal specifically with the issue of environmental judicial review and private nuisance. He pointed out, correctly, that private nuisance has enjoyed a real renaissance in recent years, as the last resort for local residents where the regulator is unable or unwilling to take effective action. His amendments sought to introduce QUOCS for environmental claims, using the Aarhus definition of such claims.  The Government opposed the amendments, according to the Minister of State, Lord McNally, on the basis that it was not clear why for environmental claims there should be “a departure from the general principle that in civil proceedings, matters relating to costs are regulated in detail by rules of court” (Col. 1582).  The Government is not persuaded that the case for extending QUOCs beyond personal injury claims has yet been made.  The Government apparently still see PCOs as the answer. Following a sometimes heated debate, the amendment was withdrawn.

The difficulty, as the Opinion makes clear, is that PCOs are not the legally compliant answer even in judicial review cases. And as Lord Thomas explained, the proposed approach in the Bill will tip the scales of justice markedly against claimants.  It may also be noted that Lord Justice Jackson has himself responded to the consultation on costs protection for litigants in environmental cases.  He reiterates the view that PCOs are not a satisfactory answer and that QUOCS is the preferred solution.  However, in the absence of Government support at this stage for that course, he has suggested a fixed costs regime be developed, which he says would represent “copper-bottomed compliance with Aarhus”.  Effectively this would mean that a claimant (unless they choose to opt out of the fixed costs regime or the defendant makes a successful application for it to be disapplied) would have their costs exposure limited to £5,000 and their costs recovery limited to £30,000.  The problem with that course however is that, as the Opinion points out, the claimant’s costs in many environmental cases will exceed £30,000 and as a result there will not be equality of arms against a corporate defendant.

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