Updated: EU court rules on costs of planning challenges

12th April 2013

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The Court of Justice of the European Union (CJEU) has ruled that the UK must ensure that the cost of mounting a legal challenge on environmental grounds is not "unreasonable"

Under the Aarhus Convention and the Public Participation Directive (2003/35/EC), the UK has to ensure that environmental legal proceedings, such as judicial reviews of planning decisions, are “not prohibitively expensive”.

However, NGO’s have repeatedly criticised the costs of pursuing an environmental legal challenge in the UK as too high. The Supreme Court had asked the CJEU to rule on the meaning of “prohibitive expense” in a case involving a Rugby resident who is facing a £90,000 bill for legal costs after failing to overturn a government decision to allow a local cement works to be built.

The CJEU ruled that the UK courts must ensure that members of the public “should not prevented from pursuing a claim” because of the financial burden that might result.

The judges concluded that in ordering an unsuccessful claimant to pay the defendant’s costs, or in granting a protection order capping costs before a case is heard, courts must ensure that they are not prohibitively expensive, taking into account both the interests of the individual and the public interest in protecting the environment.

The CJEU ruled that the courts must objectively assess the costs, and not base their decision solely on the claimant’s financial situation.

In making that decision, the courts can also consider whether the claimant has a reasonable chance of success; the importance of what is at stake both for the claimant and for the environment; and the potentially frivolous nature of the claim.

The ruling could lead to an increase in the number of legal challenges developers face, and was hailed as a step forward by the members of the Coalition for Access to Justice for the Environment, which include WWF, Friends of the Earth and the Campaign for the Protection of Rural England (CPRE).

Ralph Smyth, barrister at CPRE, said: “The government says it wants local people to have a say in planning decisions. Yet, increasingly, due to weaknesses in national planning policy, these decisions are likely to be subject to legal challenge. Today’s judgment should mean people can, without huge financial risk, challenge planning decisions that go wrong.”

Simon Colvin, senior associate at Pinsent Masons LLP and regular columnist for the environmentalist, said the ruling had clarified that UK courts need to be more flexible in assessing whether costs are “prohibitively expensive” (see below), but that it was unlikely to mark the end of confusion surrounding the application of the Aarhus convention.

“The restrictions being imposed in relation to legal aid and the ongoing debate around the level of cost caps are unlikely to be resolved in the near future,” he commented. "The government’s stated intention to further restrict the time limits for judicial review applications are also at odds with Aarhus – the saga looks set to continue."

In a bid to ensure the UK was meeting the requirements of the Aarhus Convention, regulators in Scotland and England and Wales, have introduced protective costs orders, which, if granted by the courts, limit the amount an unsuccessful claimant will have to pay towards the defendant’s costs.

In England and Wales, costs are capped at £5,000 for individual claimants and £10,000 for organisations pursuing a legal challenge. In Scotland, however, legislation allows for the caps to be flexible.

Simon Colvin, from Pinsent Masons LLP, describes the CJEU ruling:

This case is the latest in a long line relating to the UK’s compliance with the Aarhus Convention. The case was referred to the CJEU in May 2011, and the Supreme Court raised a number of specific questions, the most interesting of which were:

  1. Should the question of whether costs of litigation are "prohibitively expensive" be decided on an objective bases or a subjective one by reference to the means of the particular defendant, or upon some combination of the two?
  2. When considering whether costs are "prohibitively expensive", is it relevant that the claimant in question has not been deterred from bringing or continuing the proceedings?
  3. Should a different approach be adopted when considering an appeal or a secondary appeal in comparison to a decision at first instance?

In relation to the objective/subjective question the CJEU was clear that you could not have a rigid rule based on an objective assessment pinned to the average applicant as this would not be appropriate on every occasion. Instead a more flexible approach is required which can take account of the claimants particular circumstances. This helps to clarify the approach that should be adopted, but not the weight that is given to the different considerations.

The CJEU was clear that whether or not the claimant has been deterred in bringing a case is irrelevant. It also seems an odd question, because if the claimant had been deterred from mounting the legal challenge you would have to ask how the matter would come before a court at all. That is, unless the question relates solely to an appeal.

Finally, the ECJ was clear that the same approach should be adopted irrespective of the stage of the legal process.

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