Costs – SIMONICITY

Court Costs, Inquiry Costs

Jessie J is no judge and when it comes to litigation costs “forget about the price tag” is poor advice.

Aarhus cost caps

I last blogged about Aarhus Convention cost capping in my 22 June blog post No Time To Be 21: Where Are We With Aarhus Costs Protection? The detail is in that blog post but basically the regime allows a potential claimant in many planning and environmental cases to cap exposure to the other’s side’s costs (if the claim fails) to (subject to case by case variations) £5,000 for an individual and otherwise £10,000. As a quid pro quo, if the claimant succeeds, the claimant can only recover (subject to case by case variations) £35,000 from the other side towards its costs.

A big question, unanswered until this month, was whether these amounts are inclusive or exclusive of VAT. This only matters if the party seeking to recover the costs is not VAT-registered and cannot recover its VAT. But it matters a lot to most individuals and campaign groups.

The issue was decided following written submissions in R (Friends of the Earth) v Secretary of State for Transport (Court of Appeal, 13 January 2021). The background doesn’t matter much but is odd – Friends of the Earth were one of the parties in the Heathrow cases that won in the Court of Appeal against the Secretary of State for Transport, but the case only proceeded to the Supreme Court because interested party Heathrow Airport Limited appealed. Despite the Court of Appeal’s ruling being overturned, Secretary of State for Transport remained on the hook for Friends of the Earth’s costs from the Court of Appeal and, before then, the Divisional Court.

The relevant Aarhus Convention based costs order that had previously been made by the Court of Appeal in the main proceedings was:

“The Defendant is to pay the costs of the Claimant in the Divisional Court and in this Court, subject to detailed assessment and a cap of £35,000 in respect of the costs in the Divisional Court, and a cap of £35,000 in respect of the costs in this Court.”

Friends of the Earth submitted that this meant they were due a contribution of £70,000 towards their costs, as well as the VAT element, i.e. £84,000. (Incidentally this is the express statutory position in Northern Ireland – in England and Wales the Civil Procedure Rules are silent on the issue). The Secretary of State submitted that the cap was inclusive of any VAT element.

The Court of Appeal sided with the Secretary of State for four reasons:

“First, that is the natural meaning of the words used in those provisions. The figures are set out as absolute amounts, without qualification.

Secondly, this construction is supported by the history of the consultation exercise and the response to it by the Government in the process which led up to the enactment of CPR 45.43.

Thirdly, it does not seem to us that this would impede or frustrate the implementation in domestic law of the Aarhus Convention. That Convention simply requires that the costs of environmental litigation such as this should not be prohibitive. It does not require a contracting State to specify a particular ceiling, still less to state whether it is inclusive or exclusive of VAT.

Fourthly, the fact that the regulations applicable in Northern Ireland expressly provide for the ceilings to be exclusive of VAT does not assist FoE. Indeed, it suggests that, when the relevant legislative body wished to make the point clear, it was able to, and did so.”

So the bottom line is that the £70,000 entitlement had become an entitlement to £58,333.33 plus the VAT element on that amount.

There is an element of unequal treatment in this – if the party claiming costs were able to recover VAT the cap would in practice apply to its net costs figure, the VAT element only being an issue where the party can’t recover its VAT. Time to amend the CPR to accord with the Northern Ireland position?

Incidentally, I recommend a short YouTube summary on the case by Kings Chambers’ Martin Carter. As I write, the video has had 36 views and Jessie J’s Price Tag has had 731 million views. Come on planoraks!

Other court costs awards

Stepping aside from Aarhus costs capping, the general principle is that “if a party who has been given leave to bring a judicial review claim succeeds in establishing after fully contested proceedings that the defendant acted unlawfully, some good reason would have to be shown why he should not recover his reasonable costs” (Lord Toulson in R (on the application of Hunt) v North Somerset Council (Supreme Court, 22 July 2015) but the court of course always has a wide discretion.

That discretion may well result in no award or a reduced award. Two examples which may serve to manage expectations:

In Tomkins v City of London Corporation (Lang J, 8 December 2020) the claimant challenged the making of an experimental traffic order in relation to Beech Street, which runs under the Barbican Estate. He won on three of eight grounds but was not awarded costs:

“The Claimant’s application for the City to pay his costs is refused. Although he succeeded on three of the eight grounds, he did not succeed in quashing the [experimental traffic order]. The Council succeeded on five of the grounds, and the issues on which the Council succeeded occupied the majority of the hearing, and the post-hearing submissions. The City incurred significant costs in preparing and presenting those issues. Their costs far exceed the Claimant’s claim for costs in respect of the grounds on which he was successful. The City is not pressing for its costs, but has instead proposed that there should be no order for costs. In all the circumstances I consider that this is a just and appropriate order.”

(Town Legal’s Town Library summary is here).

In Flaxby Park Ltd v Harrogate Borough Council (Holgate J, 25 November 2020) the claimant had sought to challenge the adoption of part of the Harrogate local plan on three grounds and succeeded on part of one ground. To cut a long story short (literally), Holgate J did not allow the claimant to recover the costs of an original bundle which he considered to be disproportionately lengthy or of the preparation of a witness statement which he determined to be unnecessary, and awarded the claimant 15% of the balance of its costs:

“I do not accept HBC’s submissions that there should be no order as to costs. … It was necessary for FPL to bring proceedings, but they ought to have been on a much more limited scale. Taking into account also the unnecessary expenditure to which HBC has been put in order to resist the substantial parts of the claim where FPL was unsuccessful, FPL should be awarded only 15% of its costs…”

Appeal inquiry costs awards

In Swale Borough Council v Secretary of State (Sir Ross Cranston, 17 December 2020), Swale Council sought unsuccessfully to challenge a costs order made against it by a section 78 appeal inspector

The judgment includes a helpful review of the case law in relation to challenges to inspectors’ awards of costs, leading to the following conclusion by the judge:

“the authorities establish the following propositions:

(i) the Secretary of State is entitled to adopt a policy about costs and having done so his inspectors must apply it;

(ii) the policy is that costs may be awarded against a party for unreasonable behaviour resulting in unnecessary or wasted expense;

(iii) “unreasonable” means unreasonable in the ordinary sense of the word, not unreasonable in a Wednesbury sense;

(iv) a Council’s behaviour may be unreasonable if its refusal of planning permission could not be supported by substantial evidence, but that is not the only test and there may be other relevant factors;

(v) one example is if a developer signs a section 106 agreement; it is accepting that it is reasonable even though the inspector may not be persuaded that it is necessary.”

The Council had sought to argue that it was wrong for it to be penalised for late withdrawal of its requirement for an affordable housing contribution and for the consequence of a late indication of particular highways concerns but the judge declined to interfere with the judgment of the inspector. For instance, on the second complaint:

“In my view this is one of those cases where a different inspector may have reached a different conclusion. However, I cannot conceive that Mr Upton has surmounted the high hurdle necessary to establish that this inspector’s decision was flawed. The case which Mr Village QC put to the inspector was that the Council had not raised what became condition 19, or the further contribution to traffic calming in Darlington Drive/Parsonage Chase, until immediately before the exchange of evidence on 6 January 2020, too late to avoid the preparation of Attwood’s highways evidence. When these were raised as a way forward, Attwood agreed and it was an example of the Council’s failure to review the case promptly following the lodging of the appeal, one of the examples the PPG gives as indicating unreasonable behaviour (at para. 049, referred to earlier).”

(Town Legal’s Town Library summary of the case is here).

Simon Ricketts, 16 January 2021

Personal views, et cetera

Jenrick Allows Two Further Large London Appeals, With Costs

Exactly a week after the Westferry Printworks decision letter (see my previous blog post) on 22 January 2020 the Secretary of State allowed two further appeals in relation to significant London residential development projects, this time both decisions following his inspectors’ recommendations, and with costs awards in favour of the appellants, again as recommended by his inspectors.

Given that an award of costs can basically only be made on the basis of unreasonable behaviour by a party to the appeal (see the detailed advice in the Government’s Planning Practice Guidance), lessons plainly need to be learned – in fact what happened in both cases was pretty shocking.

North London Business Park site, Barnet

This was an appeal by Comer Homes Group against Barnet Council’s refusal of a hybrid application for planning permission for the phased comprehensive redevelopment of the North London Business Park to deliver a residential led mixed-use development:

• detailed element comprising 376 residential units in five blocks reaching eight storeys, the provision of a 5 Form Entry Secondary School, a gymnasium, a multi- use sports pitch and associated changing facilities, and improvements to open space and transport infrastructure, including improvements to the access from Brunswick Park Road, and

• outline element comprising up to 824 additional residential units in buildings ranging from two to eleven storeys, up to 5,177m2 of non-residential floorspace (Use Classes A1-A4, B1 and D1) and 2.9 hectares of public open space, associated site preparation/enabling works, transport infrastructure and junction works, landscaping and car parking.

This is the Secretary of State’s decision letter and inspector’s report in relation to the appeal and this is the Secretary of State’s decision to make a full costs award against the council, following the inspector’s recommendations.

Members had refused the application against officers’s recommendations.

The council’s failing is set out starkly in the inspector’s costs report: no proper evidence was adduced to support its decision:

“Mr Griffiths, Principal Planning Officer at the Council of the London Borough of Barnet, was the Council’s only witness at the Inquiry. He stated, in his proof of evidence, that “It is not the intention for this document to represent my professional opinion and the evidence presented represents the views of elected members of the London Borough of Barnet Planning Committee”.

The proof of evidence focusses on a particular view contained within a TVIA submitted by the Applicant and states that “Within View 11, the 8-storey height of Blocks 1E and 1F stands in harmful juxtaposition with the two-storey height of the properties on Howard Close”. But the proof acknowledges “…that buildings of up to 7 storeys in height could be acceptable in this location therefore it is pertinent to outline the additional harm that would arise from the 8 and 9 storey buildings proposed within the development and why these heights are unacceptable”.

The written evidence fails to substantiate why the extra storey on Blocks 1E and 1F would cause harm and fails to consider the effect of buildings over seven storeys in height elsewhere in the development. The proof simply repeats the assertion made in the sole reason for refusal of the application that “The proposed development, by virtue of its excessive height, scale and massing would represent an over development of the site resulting in a discordant and visually obtrusive form of development that would fail to respect its local context…to such an extent that it would be detrimental to the character and appearance of the area”.

Under cross examination Mr Griffiths refused to answer some questions put to him and to give his professional view on the effect of the proposed development on the character and appearance of the area. The Appellant was not thus afforded the opportunity, at the Inquiry, to explore the unsubstantiated assertions made in the proof of evidence and did not learn anything more about members concerns. Crucially, no member of the Planning Committee appeared at the Inquiry to substantiate their views that was unsubstantiated in the proof of evidence.

The Council has failed to produce either written or verbal evidence to substantiate the reason for refusal of the application, and has provided only vague and generalised assertions, unsupported by an objective analysis, about the proposed development’s impact. The Council has behaved unreasonably and the Appellant has incurred unnecessary expense in the appeal process. A full of award of costs against the Council is justified.”

It was hardly surprising that the Secretary of State decided to allow the appeal:

“32. The development plan restricts tall buildings to identified locations, and the proposal would include them on a site not identified as suitable for them. This conflict carries significant weight against the proposal.

33. The proposal has been designed to respect the existing character of the local area, while maximising the potential for delivering homes. It would deliver a replacement secondary school alongside new open space, sports facilities and community space. The local authority is unable to demonstrate a five-year supply of housing land without taking account of this site, and the proposal would provide 1350 new homes. The provision of the housing and the ancillary facilities both carry significant weight in favour of the proposal.

34. The Secretary of State considers that there are material considerations which indicate that the proposal should be determined other than in accordance with the development plan, and therefore concludes that the appeal should be allowed and planning permission granted.”

The inquiry sat for four days in October and November 2018 (why the inordinate delay since then?), with the appellant team comprising Christopher Katkowski QC and Robert Walton (now QC), calling four expert witnesses. The costs award will amount to a sum that would be ruinous for many private sector bodies, well into six figures – because council members took a decision without evidence and without considering whether proper evidence, or a different approach, might be required in the face of an appeal. And a scheme for well over a thousand homes and a school (first applied for in December 2015!) has been delayed for absolutely no reason.

Conington Road, Lewisham

This was an appeal by MB Lewisham Limited against Lewisham Council’s decision to refuse its application for planning permission for the construction of three buildings, measuring 8, 14 and 34 storeys in height, to provide 365 residential dwellings (use class C3) and 554 square metres (sqm) gross of commercial/ community/ office/ leisure space (Use Class A1/A2/A3/B1/D1/D2) with associated access, servicing, energy centre, car and cycle parking, landscaping and public realm works.

This is the Secretary of State’s decision letter and inspector’s report and this is the Secretary of State’s decision to make a partial award of costs against the Mayor of London, and inspector’s report.

The procedural position here was a little more complicated. After Lewisham had refused this application, the applicant had submitted a further application for planning permission which sought to address the reasons for refusal. The scheme would secure 20.19% affordable housing by habitable room, which the council accepted, on the basis of viability appraisal, was more than the maximum reasonable provision. The Council resolved to approve the application but the Mayor directed refusal, not satisfied that the viability work justified that level of affordable housing.

By that time the first application had been refused and the appellant revised the scheme to reflect the changes introduced into the second application. Accordingly, whilst the appeal was technically against Lewisham’s initial decision on the first application, in reality the only live issues were those raised by the Mayor on affordable housing and viability, including whether a late stage review mechanism was necessary in line with its policy requirement.

I suspect that you needed to be at the inquiry to appreciate the full horror as events unfolded (I wasn’t) but it appears that the viability case against the appellant’s position completely collapsed at the inquiry following exchange of evidence and cross-examination by Russell Harris QC. But that wasn’t the only problem. Presumably to save costs, the council and the Mayor both engaged the same advocate at the inquiry and, once it understood the real position on viability, the council wished to concede various issues but the Mayor was not willing so to do, meaning that the advocate immediately had a conflict of interest and, mid-inquiry, had to recuse herself from acting for the Mayor! The Mayor’s team continued to participate in the inquiry but without challenging the evidence provided by the appellant.

This is from the inspector’s report on the appellant’s costs application:

“On day 2 of the Inquiry, following cross-examination of the Council’s construction costs witness Mr Powling, the advocate representing the Council and the Greater London Authority (GLA) advised that due to a conflict of interest, the GLA would no longer be represented. The GLA however wished to continue with their objections as an unrepresented principal party. Later in the afternoon, following cross-examination by the appellant of Ms Seymour for the GLA, the Council formally withdrew its objections to the proposal on viability grounds. The Council took no further part in the Inquiry.”

“Where the operation of a direction to refuse is issued, the GLA is to be treated as a principal party. Without the GLA direction, the London Borough of Lewisham (LBL) would have granted a planning permission for a now identical scheme. This appeal only arises thus as a result of the change of the resolution to grant to reflect the terms of the GLA’s direction.

6. In its letter to the Inspectorate indicating its intention to attend, the GLA made it clear that was prosecuting its direction in terms and was expecting LBL to do the same. Therefore for all practical legal and policy purposes, the GLA must be treated as a main party prosecuting the terms of its direction at this appeal. Without that direction LBL would not have opposed this scheme and this inquiry would not have been necessary.

7. Their conduct therefore falls to be considered in accordance with the provisions for principal parties.

8. Its conduct was unreasonable in substantive terms in relation to its directed main reason for refusal. Its conduct during the inquiry was also unreasonable. Both levels of unreasonableness resulted in the inquiry and the appellant having to incur significant unnecessary expense in relation to the affordable housing issue.

9. In substantive terms, the GLA produced no evidence which met or came close to the requirements of the PPG on the issue of construction costs to support its reason for refusal.

10. Its ‘evidence” failed to meet the threshold properly to be called “evidence” It failed to engage with the agreed evidence of others that the construction costs were fair and reasonable and during the proceedings failed to read understand or engage with evidence which clearly established that its evidence was incorrect and unreasonable.

11. In terms of the double count issue, the GLA persisted with its case irrespective of evidence suggesting that it was wrong and in an unreasonable fashion after the only other relevant party advised by Leading Counsel had accepted that the point was simply not properly arguable. It chose not to read and understand the clear evidence, notwithstanding it had insisted on the reason for refusal and that it be a party at the inquiry.”

“The Greater London Authority shall pay to MB Homes Lewisham Ltd its partial costs of the inquiry proceedings, limited solely to the unnecessary or wasted expense incurred in respect of the costs of the appeal proceedings related to dealing with the issue of affordable housing after the Council decided not to represent the Greater London Authority, such costs to be taxed in default of agreement as to the amount thereof.”

Oof!

The Secretary’s conclusions on viability were as follows:

“17. The Secretary of State agrees with the Inspector that the essential differences on viability between the parties lies in a variation of around £11m in construction costs (including fees and profit); and private residential values (IR127).

Construction costs

18. The Secretary of State notes that CDM (for the GLA) consider build costs to be overstated (IR129). However, the Secretary of State also notes that independent costs estimates produced by 3 firms of costs consultants were within 2 percentage points of each other. He agrees with the Inspector that no evidence has been produced in any later analyses to show that those build costs, or any element of them considered for viability purposes, are unreasonable (IR128-131).

Fees

19. The Secretary of State notes that the level of fees remained a point of difference at the beginning of the Inquiry. The Secretary of State also notes that while detailed analysis of this issue did identify an overstatement of fees of less than £1m, this is far below the overstatement claimed by the Council and GLA. He further notes that, at the Inquiry no evidence was forthcoming from the GLA’s costs witness, CDM, to support their contention that preliminaries are set too high or that the level of professional fees of around 10% would be excessive for a project of this nature. In addition, the Council’s costs witness accepted that if a reasonable preliminaries figure of 17% or so was adopted then the whole argument in support of the £5.5m fees deduction from the overall level of costs fell away (IR132-133).

Profits

20. For the reasons given in IR134-135, the Secretary of State agrees with the Inspector that the proposed profit levels are reasonable for this scheme.

21. For the reasons given in IR136 the Secretary of State agrees with the Inspector that no evidence was offered by the Council or the GLA to counter the appellant’s build costs analysis or the level of fees or profit.

Private residential values

22. The Secretary of State has carefully considered the Inspector’s analysis in IR137-146 and agrees that the GLA’s suggested values would be unlikely to be achievable in the market (IR144).

23. The Secretary of State also notes that the GLA accepted at the Inquiry that if the £11m alleged surplus on fees and construction costs did not exist, then the claimed remaining £900,000 (IR132) would not have led to a direction to refuse from the Mayor’s office (IR146). For the reasons in IR147, the Secretary of State agrees with the Inspector that the 20.2% affordable housing proposed by the appellant is the maximum, if not somewhat more, than what can be reasonably provided, and he accordingly attaches very considerable weight to this benefit of the proposal. He finds no conflict with the requirements of LonP policy 3.12; the Mayor’s Affordable Housing and Viability SPG, Lewisham CS policy 1 and DMLP policy DM7.

Late stage review

24. For the reasons given in IR148-149, the Secretary of State agrees with the Inspector that there is no pressing case for a late stage review for a scheme such as this, where development is proposed to be completed in a single phase. He finds no conflict with the requirements of LP policy 3.12, the Mayor’s Affordable Housing and Viability SPG, Lewisham CS policy 1 and DMLP policy DM7.”

“In favour, the Secretary of State affords very considerable weight to the provision of market and affordable housing. He also affords moderate weight to the positive contribution to the character and appearance of the emerging Lewisham Town centre.”

And no late stage review!

In amongst the horror show for both the council and the Mayor seems to have been some simple lack of communication as between their witnesses. Quoting from the inspector’s summary of Lewisham’s case:

“When the appellant’s viability proof was received and reviewed it did not appear that the short reference in paragraph 7.2 to the Gardiner & Theobald review report raised any pertinent issue. This was particularly so as the proof suggested that the appellant’s basis for assessment of costs was unaltered.

As a consequence the Council’s viability witness did not send its costs witness the appellant’s viability proof (which dealt with numerous other issues not relevant to costs estimates). On review at the Inquiry, the Council’s build cost estimate was revised from £107,179,737 to £111,809,368 representing a difference of £4,629,631. The consequence of this was that it changed appraisal A – 2018 Residential Pricing to negative £1,155,982 and Appraisal B – 2017 residential pricing (less HPI) reduced to £ 3,111,251. This still represents a £20m disparity approximately with the appellant’s viability conclusions. It nonetheless reduced the margin of surplus on the Council’s assessment to fall within an acceptable margin of error“.

Oof.

Where would we be without the ability properly to test evidence at inquiry?

Simon Ricketts, 25 January 2020

Personal views, et cetera

PS not to be too London-centric, I should add that on the same day the Secretary of State also allowed an appeal for 850 homes near Tewkesbury.

The appeal stats for 2020 are already going to look more healthy than those for the last two years, which become apparent if you interrogate our Town Legal 2014-2019 housing inquiry appeals data visualisation tool.

No Time To Be 21: Where Are We With Aarhus Costs Protection?

As with blog posts, it is helpful for legislation to have a snappy title.

The United Nations Economic Commission for Europe’s Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters is therefore better known as the Aarhus Convention, after the city in Denmark where it was signed on 25 June 1998.

It currently has 47 parties. The UK ratified it in February 2005, as did the EU.

The Convention has three pillars:

⁃ access to information

⁃ public participation in decision making

⁃ access to justice

You will know that the Aarhus Convention requires that access to justice in environmental matters should be “be fair, equitable, timely and not prohibitively expensive”, a challenging requirement in jurisdictions such as ours where access to justice in environmental matters frequently relies upon access to the High Court and appellate courts thereafter, and where processes are almost by definition prohibitively expensive – not just your own lawyers’ costs (cough) but, if the dice roll the wrong way, your liability for those of the defendant authority.

I last properly blogged on Parliament’s, and the English courts system’s, response to that challenge in my blog post dated 11 March 2017, Aarhus: Caps In The Air Again.

I agreed to speak on this subject at the Kingsland Conference event at King’s College London arranged for this Tuesday to mark the 21st anniversary of the signing of the Convention. If this post whets your appetite to hear that day from much more knowledgeable people than me on every aspect of the Convention’s three pillars, then do sign up.

In itself, the Convention has no direct effect in domestic law and its enforcement is indirect, at member state level via meetings of the parties to the Convention and non-binding communications by the Aarhus Convention Compliance Committee. I say “in itself” because it does have direct effect in domestic law via specific EU directives in relation to environmental protection, which was the basis for the European Court of Justice’s preliminary ruling in Edwards (CJEU, 11 April 2013).

At the time of my March 2017 blog post the Civil Procedure (Amendment) Rules 2017 had just come into force, which tightened up the regime in various ways.

The claimant’s default cap against exposure to the defendant’s legal costs in an Aarhus Convention claim) is still £5k where the claimant is an individual and otherwise £10k, with the default cap on how much the claimant can claim if successful still capped at £35k. The caps apply to each party where there are multiple claimants or multiple defendants.

An Aarhus Convention claim is basically defined as a claim brought by a member of the public, challenging the legality of a decision on grounds which concern environmental matters as defined in Articles 9 (1), (2) and (3) or the Convention, whether the claim is by judicial review, or under two specific forms of statutory review:

⁃ section 289 of the Town and Country Planning Act 1990 (challenges to decisions in relation to enforcement notice appeals)

⁃ section 65 of the Town and Country Planning (Listed Buildings and Conservation Areas) Act 1990 ((challenges to decisions in relation to listed building enforcement notice appeals)

The 2017 changes introduced the requirement that, where a claimant brings a claim and is seeking Aarhus costs protection it must say so on the claim form and must file a schedule of financial resources. The court may remove or vary the cap in these circumstances if satisfied that “to do so would not make the costs of the proceedings prohibitively expensive for the claimant“.

Proceedings are to be considered prohibitively expensive if their likely costs (including any court fees which are payable by the claimant) either—

“(a) exceed the financial resources of the claimant, or

(b) are objectively unreasonable having regard to –

(i) the situation of the parties;

(ii) whether the claimant has a reasonable prospect of success;

(iii) the importance of what is at stake for the claimant;

(iv) the importance of what is at stake for the environment;

(v) the complexity of the relevant law and procedure; and

(vi) whether the claim is frivolous“.

Where the court considers the financial resources of the claimant, “it must have regard to any financial support which any person has provided or is likely to provide to the claimant”.

Three aspects of the 2017 rule amendments were challenged by the the RSPB, Friends of the Earth and ClientEarth in R (RSPB) v Secretary of State for Justice (Dove J, 15 September 2017):

1. The ability for the court to vary costs caps at any stage in the litigation would not meet the EU law requirement for “reasonable predictability”

2. No express provision for hearings to be in private when a claimant or a third party supporter’s financial details may be discussed and examined.

3. Uncertainty as to whether the claimant’s own costs of bringing the litigation should be included in any assessment of their financial resources.

Dove J’s judgment is essential reading for an understanding of the background to costs capping in environmental matters, including the domestic and CJEU authorities.

He found against the claimants on the first ground but the issue was addressed in any event by Parliament in the Civil Procedure (Amendment) Rules 2018 which tightened up the procedural rules to make it clear that, save where there is a significant change in circumstances, variation of the caps can only be considered by the court if either the applicant had so requested in his claim form or if the defendant had so requested in his acknowledgement of service.

He found for the claimants on the second ground and the rules have again been changed to specify that hearings in relation to examination of claimants’ financial details must be heard in private.

He found that it was unnecessary to make a formal declaration to deal with the third ground but considered that it was clear that the court may indeed take account of a claimant’s reasonable costs in determining whether proceedings are “prohibitively expensive“.

The 2017 rule amendments defined “environmental matters” by reference to matters falling within the scope of Article 9 (1) to (3) of the Convention. I had wrongly assumed in my previous blog that the effect might be to limit the scope of the procedure but that has not been the case, following the broad meaning given by the Court of Appeal in Secretary of State v Venn (Court of Appeal, 27 November 2014).

I had also wondered whether the reference to “members of the public” in the amended rules might exclude parish councils from seeking Aarhus costs protection, but that assumption may also have been misplaced. At the permission stage of Crondall Parish Council v Secretary of State (Dove J, 14 May 2019), deputy judge John Howell QC accepted that the parish council was indeed a “member of the public”.

The 2017 rule amendments do not extend the automatic costs capping process to the Court of Appeal and beyond. It will be for the appellate court to consider whether the costs of the appeal proceedings will be prohibitively expensive for a party which was a claimant (with no guidance as to how the costs of previous stages in the litigation are to be taken into account).

The UK is still under some international pressure as to its approach to compliance. In its September 2017 decision VI/8k, the Economic Commission for Europe noted that “while the 2017 amendments to the cost protection system in England and Wales introduced some positive improvements, the 2017 amendments overall appear to have moved [the UK] further away from meeting the requirements of its 2014 decision V/9n, namely that the UK should:

“(a) Further review its system for allocating costs in all court procedures subject to article 9, and undertake practical and legislative measures to ensure that the allocation of costs in all such cases is fair and equitable and not prohibitively expensive;

(b) Further consider the establishment of appropriate assistance mechanisms to remove or reduce financial barriers to access to justice;

(d) Put in place the necessary legislative, regulatory and other measures to establish a clear, transparent and consistent framework to implement article 9, paragraph 4, of the Convention”.

Furthermore, “by failing to ensure that private nuisance proceedings within the scope of article 9, paragraph 3, of the Convention, and for which there is no fully adequate alternative procedure, are not prohibitively expensive, the Party concerned fails to comply with article 9, paragraph 4, of the Convention“.

There is also a complaint which is being investigated by the Aarhus Convention Compliance Committee. It is based on (1) the exclusion from current system of automatic costs capping for section 288 challenges of planning appeal decisions and (2) the risk of public disclosure of claimants’ financial means.

The complainant sets out the position as follows:

“In 2008 a property developer sought to obtain planning permission to build an estate of 18 houses in open countryside outside of Ashover, Derbyshire. Permission to carry out this development was refused. The developer then reapplied for planning permission to develop 26 houses in 2014 and again in 2015. These applications were both refused. An appeal was made against the most recent decision and an Inspector was appointed by the Secretary of State for Communities and Local Government to hear the evidence and make a recommendation to the Secretary of State. After hearing all evidence over a four-day period and visiting the site the Inspector recommended that the appeal be dismissed and planning permission be refused. The Secretary of State disagreed with his Inspector’s recommendation, allowed the appeal, and granted planning permission.

Challenging the Decision

Objectors to the development sought a legal opinion on challenging the Secretary of State’s decision. It was the opinion of counsel that challenging the Secretary of State’s decision would be extremely costly and could fail. The costs protection regime for “Aarhus claims” would not be available for challenges to decisions of the Secretary of State even though the only difference rendering it inapplicable was the identity of the decision-maker. As a result of the uncertainty as to costs no member of the public had the appetite to challenge the decision.

We have been made aware that amendments were made to Part 45 Section VII of England and Wales’ Civil Procedure Rules (“CPR”) (“The 2017 Amendments”) on 28th February 2017. These mean that any claimant or a third party supporter of a claim now risks public disclosure of their financial means.”

DEFRA’s response dated 8 March 2019 is interesting:

1. Section 288 challenges will be brought within the scope of the rules later this year.

2. The new Civil Procedure (Amendment) Rules 2019 change the criteria as to when a hearing will be held in private but one of the criteria is whether “it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality“.

There do remain various open questions, for instance:

1. Post-Brexit, how will we see the Government flesh out the principle outlined in the draft Environment (Principles and Governance) Bill of “access to justice in relation to environmental matters“?

2. Does the current process give claimants “reasonable predictability“?

2. What are the practical risks for a defendant, in terms of potentially thereby elongating proceedings, in seeking to vary or remove a costs cap?

3. What effects are the changes having in practice on potential claimants as well as third party funders?

4. Where there is no Aarhus costs protection, are we going to see more applications for security for costs by defendants: the £250,000 required of Heathrow Hub Limited for example in the recent Heathrow proceedings (to be heard in the Court of Appeal in November) or the £60,000 required of the claimant in We Love Hackney v London Borough of Hackney (Farbey J, 17 April 2019).

Happy birthday, Aarhus Convention. Let them eat cake?

Simon Ricketts, 22 June 2019

Personal views, et cetera

Lessons From The Heathrow Cases

In my 15 October 2016 blog post Airports & Courts I made the obvious prediction that publication by the Secretary of State for Transport of the Airports National Policy Statement (“ANPS”) would inevitably lead to litigation. The ANPS is important because under the Planning Act 2008 it sets the policy basis for a third runway at Heathrow to the north west of the current runways (the “NWR Scheme”).

It was always going to be important for the High Court to be able to rise to the (in a non-legal sense) administrative challenge of disposing of claims efficiently and fairly. The purpose of this blog post is to look at how that was achieved (no easy feat) and what we can learn more generally from the court’s approach to the litigation

The ANPS was designated on 26 June 2018 and five claims were brought seeking to challenge that decision:

⁃ A litigant in person, Neil Spurrier (a solicitor who is a member of the Teddington Action Group)

⁃ A group comprising the London Borough of Richmond-upon-Thames, the Royal Borough of Windsor and Maidenhead, the London Borough of Hammersmith and Fulham, Greenpeace and the Mayor of London

⁃ Friends of the Earth

⁃ Plan B Earth

⁃ Heathrow Hub Limited and Runway Innovations Limited [unlike the other claimants above, these claimants argue for an extension of the current northern runway so that it can effectively operate as two separate runways. This scheme was known as the Extended Northern Runway Scheme (“the ENR Scheme”)]

Arora Holdings Limited joined as an interested party to each set of proceedings in pursuance of their case for a consolidated terminal facility to the west of the airport.

The Speaker for the House of Commons intervened in the Heathrow Hub Limited claim to object to various statements made to Parliament and Parliamentary Committees being admitted in evidence.

The first four claims raised 22 separate grounds of challenge. The fifth claim raised a further five grounds of challenge.

As Planning Liaison Judge, ie effectively lead judge within the Planning Court, Holgate J in my view has played an extremely effective role. Following a directions hearing, ahead of a subsequent pre-trial review three months later, he laid down a comprehensive set of directions on 4 October 2018 which provided for:

⁃ the first four claims to be heard at a single rolled up hearing, followed by the fifth claim

⁃ the cases to be heard by a Divisional Court (ie two or more judges, normally a High Court Judge and a Lord Justice of Appeal. In the event, the four claims were heard by a Divisional Court comprising Hickinbottom LJ and Holgate J. The fifth claim was heard immediately afterwards by a Divisional Court comprising Hickinbottom LJ, and Holgate and Marcus Smith JJ.)

⁃ video link to a second court room and (paid for jointly by the parties in agreed proportions) live searchable transcripts of each day’s proceedings

⁃ procedure to be followed in relation to expert evidence sought to be submitted in support of the first claim

⁃ statements of common ground

⁃ amended grounds of claim, with strict page limits and against the background of a request from the judge to “review the extent to which they consider that any legal grounds of challenge previously relied upon remain properly arguable in the light of the Acknowledgments of Service“, and with specific claimants leading on individual issues

⁃ bundles and skeleton arguments complying with strict page limits and other requirements

⁃ payment of security for costs by Heathrow Hub Limited in the sum of £250,000

⁃ cost capping in the other claims on Aarhus Convention principles

The main proceedings were heard over seven days in March, with the Heathrow Hub proceedings then taking a further three days (followed by written submissions). As directed by Holgate J, hearing transcripts were made publicly available.

Less than six weeks after close of the Heathrow Hub hearing, judgment was handed on 1 May 2019 in both case:

R (Spurrier & others) v Secretary of State (Divisional Court, 1 May 2019)

R (Heathrow Hub Limited & Runway Innovations Limited) v Secretary of State (Divisional Court, 1 May 2019)

The transcript of the first judgment runs to 184 pages and the transcript of the second judgment runs to 72 pages.

I am not going to summarise the judgments in this blog post but happily there is no need as the court at the same time issued a summary, which serves as a helpful précis of the claims and the court’s reasoning for rejecting each of them.

The Divisional Court found that all but six grounds were unarguable (the six being two Habitats Directive grounds from the first case, two SEA grounds from the first case and two from the second case (legitimate expectation and anti-competition). “All the other grounds were not considered not to have been arguable: the claimants may apply for permission to appeal against the Divisional Court’s decision concerning those grounds to the Court of Appeal within 7 days. The remaining six grounds were ultimately dismissed. The claimants may apply to the Divisional Court for permission to appeal within 7 days. If the Divisional Court refuses permission to appeal to the Court of Appeal, the claimants may re-apply directly to the Court of Appeal.”

The Secretary of State for Transport gave a written statement in the House of Commons on the same day, welcoming the judgments.

The two judgments will be essential reading in due course for all involved in similar challenges; the 29 grounds, and various additional preliminary points, cover a wide range of issues frequently raised in these sorts of cases and each is carefully dealt with, with some useful textbook style analysis.

In the Spurrier judgment:

– the scope for challenge of an NPS (paras 86 to 90)

⁃ relationship between the NPS and DCO process (paras 91 to 112)

⁃ extent of duty to give reasons for the policy set out in the NPS (paras 113 to 123)

⁃ consultation requirements in relation to preparation of an NPS (paras 124 to 140)

⁃ standard of review in relation to each of the grounds of challenge (paras 141 to 184)

⁃ the limited circumstances in which expert evidence is admissible in judicial review (paras 174 to 179)

⁃ whether updated information should have been taken into account (paras 201 to 209)

⁃ whether mode share targets were taken into account that were not realistically capable of being delivered (paras 210 to 219)

⁃ the relevance of the Air Quality Directive for the Secretary of State’s decision making (paras 220 to 285)

⁃ compliance with the Habitats Directive (paras 286 to 373)

⁃ compliance with the Strategic Environmental Assessment Directive (paras 374 to 502)

⁃ whether consultation was carried out with an open mind (paras 503 to 552)

⁃ whether the decision to designate the ANPS was tainted by bias (paras 553 to 557)

⁃ the relevance of the Government’s commitments to combat climate change (paras 558 to 660)

⁃ whether there was a breach of the European Convention on Human Rights (paras 661 to 665)

In the Heathrow Hub judgment:

⁃ legitimate expectation (paras 113 to 138)

⁃ use of Parliamentary material in the context of Article 9 of the Bill of Rights (paras 139 to 152)

⁃ competition law (paras 157 to 209).

As we wait to see whether any of these claims go further, I note that Arora has commenced pre application consultation ahead of submitting a draft DCO for a “consolidated terminal facility to the west of the airport, which we are calling Heathrow West, related infrastructure and changes to the nearby road and river network.” Now that is going to be another interesting story in due course. I’m not sure we have previously seen duelling DCOs…

Simon Ricketts, 4 May 2019

Personal views, et cetera

Long Players: Time & Money

Is there more that can be done to encourage timely resolution of issues that arise at planning application stage?

Two prompts for this blog post:

1.Provectus Remediation Limited v Derbyshire County Council (Sir Wyn Williams, 8 June 2018), which considered the circumstances in which an applicant for planning permission is entitled to a full fee refund if the application is not determined within 26 weeks.

2. The Secretary of State’s Lotmead Farm, Swindon decision dated 13 June 2018 to accept his inspector’s recommendation to award the local authority its costs against the appellant for unreasonable behaviour in relation to two appeals – on the basis that the appeal process had been used to “evolve the schemes“, contrary to the Planning Inspectorate’s procedural guide (the Secretary of State having dismissed the appeals in a separate decision letter of the same date).

Planning application refunds

In our ridiculous legislative patchwork you need to look at the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2013 which amended the 2012 Regulations from 1 October 2013 so as to introduce, as Regulation 9A, the right for an applicant to have its application fee refunded “in the event that the local planning authority fail, or the Secretary of State, in relation to an application made under section 62A of the 1990 Act fails, to determine the application within 26 weeks of the date when a valid application was received by the local planning authority or the Secretary of State, as the case may be.”

Regulation 9A (2) provides that the right does not apply where “the applicant and the local planning authority, or, in the case of an application under section 62A of the 1990 Act, the Secretary of State, have agreed in writing that the application is to be determined within an extended period“, the application has been called in, is the subject of an appeal or of judicial review.

In the Provectus case, the claimant had submitted its planning application on 14 September 2014, paying an application fee of £44,000, withdrew the application and resubmitted the application on 22 December 2015 (no additional fee payable due to Regulation 9 of the 2012 Regulations), which was registered by the local planning authority on 25 January 2016. Further environmental information was requested by the authority in April 2016, which was provided (following an extension of time requested by the claimant) in July 2016. On 3 August 2016 the authority requested an extension of time for determining the application and an extension to 7 November 2016 was agreed. Further environmental information was then sought by the authority during the period, the claimant’s agent agreed to that and then was replaced by another agent, which no longer agreed to provide the information, arguing that it had in part already been provided and in part was unnecessary. In December 2016 the claimant appealed on the basis of non-determination and in March 2017 requested that the authority refund the fee.

So in short, a real mess but unfortunately not an unusual sequence of events. From a limited knowledge of events gained solely from the account in the judgment, I would guess that neither side particularly smelt of roses.

The claimant judicially reviewed the decision of the authority to refuse to refund the application fee. The authority took the position that Regulation 9A (2) disapplies the right where the applicant and authority have agreed an extended period for determining the application. The claimant argued that this should not be the case if the application is not then determined within the agreed extended period. To assist their respective stances, both parties’ counsel sought to rely on different parts of the explanatory memorandum that accompanied the 2013 Regulations.

Wholly unsurprisingly, the judge rejected any purposive interpretation:

“A refund of a fee paid at the time of a planning application should be made only if a period of 26 weeks has elapsed from the receipt of a valid application and that application has not been determined by the local planning authority. In my judgment, if the applicant and the local planning authority agree in writing that the 26 week period should be extended the planning fee paid by the applicant does not fall to be refunded even if the local planning authority fails to determine the application within the extended period.”

So the claimant did not recover its £44,000 and now faces not only a costs bill from its own lawyers but liability to pay the authority’s costs in relation to the litigation.

The case does highlight a few things:

1. Don’t forget about the right to a refund.

2. Take it into account in your decision making as to whether to agree a time extension.

3. The Regulations plainly risk giving rise to perverse incentives: (1) it is so much safer for an authority if it can agree an extension of time, after which it is not at risk of a fee refund however poor its performance and (2) canny applicants may decline to agree time extensions where an application is running into the sand.

I did wonder to myself why the argument wasn’t made by the claimant that at least 26 weeks had already passed between the submission of a valid application in December 2015 and the agreed time extension but I assume that this wouldn’t have worked given that the formal request under the EIA Regulations for further environmental information would have had the effect of stopping the clock running until the information had been provided and/or that the agreed extension of time for providing that additional environmental information may have itself disapplied Regulation 9A? As ever reality is more complicated than legislation envisages.

Using the appeal system to “evolve” a scheme

Where there is lack of engagement on the part of a local planning authority, what real remedy is there aside from an appeal? And yet Annexe B of the Planning Inspectorate’s procedural guide seeks to encourage resolution of issues before an appeal has been submitted, reflecting the advice in the Planning Practice Guidance:

“Before making any appeal the party seeking permission should first consider re-engaging with the local planning authority to discuss whether any changes to the proposal would make it more acceptable and likely to gain permission. It is possible that a further planning application may be submitted without charge. However, this will depend on the circumstances of each case, so parties should ask the local planning authority for further details.”

Annexe M of the PINS procedural guide states:

“M.2.1 If an appeal is made the appeal process should not be used to evolve a scheme and it is important that what is considered by the Inspector is essentially what was considered by the local planning authority, and on which interested people’s views were sought.

M.2.2 Where, exceptionally, amendments are proposed during the appeals process the Inspector will take account of the Wheatcroft Principles when deciding if the proposals can be formally amended. In the ‘Wheatcroft’ judgment22 the High Court considered the issue of amendments in the context of conditions and established that “the main, but not the only, criterion on which… judgment should be exercised is whether the development is so changed that to grant it would be to deprive those who should have been consulted on the changed development of the opportunity of such consultation”. It has subsequently been established that the power to consider amendments is not limited to cases where the effect of a proposed amendment would be to reduce the development.

M.2.3 Whilst amendments to a scheme might be thought to be of little significance, in some cases even minor changes can materially alter the nature of an application and lead to possible prejudice to other interested people.

M.2.4 The Inspector has to consider if the suggested amendment(s) might prejudice anyone involved in the appeal. He or she may reach the conclusion that the proposed amendment(s) should not be considered and that the appeal has to be decided on the basis of the proposal as set out in the application.”

The position in which the developer found itself at the Lotmead Farm appeals was that it had sought pre-application advice from Swindon Borough Council over a period from December 2013 to May 2015 in relation to a proposal for up to 2,600 homes together with associated development, on a site with a strategic allocation in the local plan. An application for outline planning permission for the whole scheme as well as an application for outline permission for an initial phase of 200 homes were made on 30 April 2015. The council made a series of requests for further information and for extensions of time. The council refused the applications on 30 June 2016 at a point where the developer was seeking to resolve or at least narrow the issues.

After submitting appeals against the refusals the developer then made a series of amendments to the proposals to seek to address the reasons for refusal. At a pre-inquiry meeting the developer indicated the scope of the amendments that would be made and that an ES addendum would shortly be publicised. The inspector postponed the inquiry to allow participants in the inquiry to have sufficient preparation time. The amendments apparently were then more significant than had been identified. The changes included an additional 2 form entry primary school, an increase in the red line area, changes to the transport proposals, to all of the parameter plans and to the illustrative masterplan and green infrastructure parameter plans. “Moreover, over the following months additional amendments and information were submitted by the appellant and corrections were made to submitted documents“. The ES addendum entailed six of the topic areas being superseded.

In his report on the appeals, the inspector sets out the amendments in detail before stating at paragraph 10.14:

“In conclusion, the amended schemes are very significantly different to those determined by the Council and have evolved considerably during the course of the appeals. To use the appeal process in this way is contrary to Procedural Guidance and does not sit comfortably with the Wheatcroft principle. There are no exceptional circumstances to justify this approach. No specific case of prejudice has been highlighted but compliance with the Procedural Guidance is the best way to ensure no-one is disadvantaged through the appeal process.”

She considered that it was appropriate to consider the appeals on the basis of the originally submitted proposals, although (since the appeals had been recovered for the Secretary of State’s own determination) she considered the proposed revisions in detail as well in case the Secretary of State took a different approach. She recommended that the appeals be dismissed, whether or not the revised proposals were considered.

In his decision letter, the Secretary of State accepted the recommendation that the revised proposals should not be considered:

“13. The Secretary of State has given careful consideration to the Inspector’s analysis at IR10.1-10.15. The Secretary of State has taken into account that all parameter plans and the illustrative masterplans were amended (IR10.6). The Secretary of State has further taken into account that the ES also was substantially reviewed, with six of the topic chapters being superseded. The Secretary of State has further taken into account at IR10.7 that further amendments were made including proposals for access, surface water management, trees and landscaping. For the reasons given at IR10.6-10.7, the Secretary of State agrees with the Inspector at IR10.7 that the evolution of the proposals results in an overall very considerable change to the schemes and to the quality of the supporting information.

14. For the reasons given at IR10.6-10.7, the Secretary of State agrees with the Inspector at IR10.8 that the amended schemes are not the schemes determined by the local planning authority in June 2016 and on which interested people’s views were sought (IR10.8). The Secretary of State agrees with the Inspector that the narrowing of the areas of dispute was of assistance to the efficient running of the inquiry but was carried out very late in the day. He further agrees that the approach adopted by the appellant during the course of the appeals has not been in accordance with procedural guidance (IR10.8).

15. As such, the Secretary of State agrees with the Inspector at IR10.9 that the changes to the proposals in the Masterplan and the Phase 1 appeals are sufficiently material that consultation on the amendments would be essential.

16. The Secretary of State has taken into account the Inspector’s conclusions on consultation at IR10.10-10.13. The Secretary of State agrees with the Inspector at IR10.14 that the amended schemes are very significantly different to those determined by the Council and have evolved considerably during the course of the appeals. He further agrees that to use the appeal process in this way is contrary to procedural guidance and does not sit comfortably with the Wheatcroft principle and there are no exceptional circumstances to justify this approach; and agrees that no specific case of prejudice has been highlighted but compliance with the procedural guidance is the best way to ensure no-one is disadvantaged through the appeal process (IR10.14). He concludes, in agreement with the Inspector, that the appeals should be determined on the basis of the original proposals (IR10.15).”

A separate report and decision letter addressed an application for costs that was made by the borough council. The inspector recommended that a full award of costs be allowed:

“Unreasonable behaviour resulting in unnecessary or wasted expense, as described in the Planning Practice Guidance, has been demonstrated in that:

• appeals were made on the original schemes when there was no reasonable prospect of success, and

• the appeal process was used to evolve the schemes, which was contrary to Procedural Guidance.”

She noted that if amendments to the proposals had been pursued through another application “there would be a greater probability of compromise on both sides, outside of the adversarial appeal process. The normal development management process has been avoided.”

The Secretary of State agreed.

Perhaps here the circumstances were exceptional but I do worry whether this is the right direction for the planning system to be heading in – although I appreciate that the Government and the Planning Inspectorate would prefer a clean, front-loaded appeal process that is only used as a last resort. If anything may conceivably focus a local planning authority on resolving matters with an applicant, it is the risk that its position may come under scrutiny at inquiry. I do not know if this was the case at Lotmead Farm but sometimes it is impossible to ascertain what the authority’s position is, or what changes to a scheme may be considered acceptable. If the developer has to wait for a refusal notice and start again with a further application before appealing, without the ability to bring matters to a head by way of the appeal and changes made as part of the appeal process, appealing becomes increasingly impractical as an option (and the authority knows it).

Of course there has to be a limit to the scale of any amendments made at the appeal stage. But as long as the amendments are fully consulted upon is there really such a problem if they improve the scheme and ensure that permission can be granted by the inspector or Secretary of State rather than a further application being required? Not only do we now have an appeal process that is increasingly slow, we have a process that is increasingly impractical in relation to complex schemes, where interation is inevitable and surely no bad thing.

At least through its appeal, notwithstanding not achieving permission and having an expensive adverse award of costs against it, the Lotmead Farm developer did manage to narrow various issues with the authority and third parties, and secure detailed comments from the inspector on various elements of its proposals, some negative, some negative, but sufficient presumably now to form the firm basis for a further application. The inspector even identified a series of elements of the section 106 package that did not comply with regulation 122 and which presumably will not be included next time round (which will save a substantial sum). It is just a shame that there is not the ability to secure, more nimbly, equivalent independent expert input during the application stage itself so as to resolve differences – rather than tie everyone up in a slow, expensive and adversarial process.

Simon Ricketts, 15 June 2018

Personal views, et cetera

Money & Justice: Tribunal Fees, Licensing Fees, Court Costs

Topical issue: what are the legal constraints on the Government and local authorities in setting the fee rates and cost recovery regimes for administrative and court processes?
Claimant and applicant fee rates in particular are seen by the Government as a lever to seek to
– ensure that users of procedures make a fair contribution to the costs of providing them

– reduce the burden on the public purse and

– winnow out those who are seen as misusing the system.

This is however a dangerous game, if access to justice is to be maintained in accordance with domestic and international legal principles. How to get it right?
Dove J heard on 19 July the judicial review by RSPB, Friends of the Earth and ClientEarth of the Government’s changes to the cost capping regime regime that applies to JRs relating to environmental law matters. They take the position that the changes breach the Aarhus Convention’s requirement that access to environmental justice must be available, without prohibitive cost. I have previously blogged on the Government’s changes. ClientEarth issued this press release after the hearing but judgment has been reserved.

I would not be surprised if that set of proceedings did not end up in the Supreme Court. If so, it could be a worthy sequel to two interesting rulings from the Supreme Court in the last couple of weeks in relation to different subject areas but that same underlying theme.

R (Unison) v Lord Chancellor (Supreme Court, 26 July 2017) concerned a challenge by trade union Unison to the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013. The Supreme Court agreed with the claimant that the fee regime for claimants in employment tribunal proceedings and appellants in relation to appeals to the Employment Appeal Tribunal was unlawful because of its effects on access to justice. The full judgment handed down by Lord Reed and supplementary judgment by Lady Hale in relation to discrimination issues are well worth reading. Here are some quotes, which you may care to read with our planning system in mind:
There is a “constitutional right of access to justice: that is to say, access to the courts (and tribunals: R v Secretary of State for the Home Department, Ex p Saleem [2001] 1 WLR 443).” (paragraph 65)
“At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.” (paragraph 68)
“People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations.” (paragraph 71)
“There is however no dispute that the purposes which underlay the making of the Fees Order are legitimate. Fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice. Measures that deter the bringing of frivolous and vexatious cases can also increase the efficiency of the justice system and overall access to justice.” (paragraph 86)
“The Lord Chancellor cannot, however, lawfully impose whatever fees he chooses in order to achieve those purposes. It follows from the authorities cited that the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice. That will be so because section 42 of the 2007 Act contains no words authorising the prevention of access to the relevant tribunals. That is indeed accepted by the Lord Chancellor. ” (paragraph 87)
“In order for the fees to be lawful, they have to be set at a level that everyone can afford, taking into account the availability of full or partial remission. The evidence now before the court, considered realistically and as a whole, leads to the conclusion that that requirement is not met. In the first place, as the Review Report concludes, “it is clear that there has been a sharp, substantial and sustained fall in the volume of case receipts as a result of the introduction of fees”. While the Review Report fairly states that there is no conclusive evidence that the fees have prevented people from bringing claims, the court does not require conclusive evidence: as the Hillingdon case indicates, it is sufficient in this context if a real risk is demonstrated. The fall in the number of claims has in any event been so sharp, so substantial, and so sustained as to warrant the conclusion that a significant number of people who would otherwise have brought claims have found the fees to be unaffordable.” (paragraph 91)
“The question whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable.” (paragraph 93)
“Given the conclusion that the fees imposed by the Fees Order are in practice unaffordable by some people, and that they are so high as in practice to prevent even people who can afford them from pursuing claims for small amounts and non- monetary claims, it follows that the Fees Order imposes limitations on the exercise of EU rights which are disproportionate, and that it is therefore unlawful under EU law.” (paragraph 117)
The previous week the Supreme Court had returned to the difficult and long-running saga of challenges to Westminster City Council’s fees regime for the licensing of sex shops. The case has been an unholy mess for the Council. It had been setting licensing fees at a rate that included its costs of enforcing the licensing scheme against unlicensed third parties running sex shops. The fee was made up of two parts. One part was payable regarding the administration of the application and was non-refundable. Another part (which was considerably larger – £29,435 in 2011/12) was for the management of the licensing regime and was refundable if the application was refused. Licensed shops brought a challenge, arguing that the second element of the fee was in breach of the Provision of Services Regulations 2009 (SI 2009/2999) (which had been made to give effect domestically to EU Directive 2006/123/EC) and that the only fees that the Council could levy related to the administrative costs of processing the relevant applications and monitoring compliance with the terms of the licence by licence holder, rather than fund enforcement against those who didn’t seek or obtain licences.
Regulation 18 of the 2009 Regulations provides that:
“(2) Authorisation procedures and formalities provided for by a competent authority under an authorisation scheme must not –

(a) be dissuasive, or

(b) unduly complicate or delay the provision of the service”

“(4) Any charges provided for by a competent authority which applicants may incur under an authorisation scheme must be reasonable and proportionate to the cost of the procedures and formalities under the scheme and must not exceed the cost of those procedures and formalities.”

The Court of Appeal had upheld the claim in 2013 and as a result made repayments totalling £1,189,466 to the licence holders, together with a further £227,779.15 which it paid, it turned out, by mistake.
However, the Supreme Court overturned that ruling in 2015, finding that the fees regime was basically lawful. There was one aspect which the court referred to the European Court of Justice, namely the way in which the part of the fee which covered wider enforcement costs was paid upfront when the application was made but only repaid if the application was unsuccessful. The European Court confirmed in November 2016 that this aspect of the regime was indeed unlawful.
The case came back to the Supreme Court with the Council arguing that it was entitled to be paid or repaid the sums it repaid to licence holders in 2013 and the licence holders in turn contending that they are entitled to retain the repayment made to them in full, because it was charged in a way which in part at least had been unlawful. In its judgment dated 19 July 2017 the court basically agreed with the Council that it is entitled to be reimbursed to the extent that it has raised fees lawfully, but it has remitted the case to the Administrative Court to resolve a whole host of complexities that arise from the whole mess, including a number of accounting issues, complications arising where licensees have ceased to exist and the recovery of the monies that the Council had paid by mistake.
Implications for planning
It may be thought that our planning system currently has the opposite problem: many applicants would be willing to pay higher application fees if the fees enabled authorities to staff up and offer a faster, better, service. The Government went less far than many would have wished when it announced in its February 2017 housing white paper that:
“We will increase nationally set planning fees. Local authorities will be able to increase fees by 20% from July 2017 if they commit to invest the additional fee income in their planning department. We are also minded to allow an increase of a further 20% for those authorities who are delivering the homes their communities need and we will consult further on the detail. Alongside we will keep the resourcing of local authority planning departments, and where fees can be charged, under review.” (para 2.15)
But even that relatively weak and overdue measure has not yet been brought into effect.
More controversially the white paper indicated that the Government would consult on introducing a fee for applicants submitting planning appeals: “We are interested in views on this approach and in particular whether it is possible to design a fee in such a way that it does not discourage developers, particularly SMEs, from bringing forward legitimate appeals. One option would be for the fee to be capped, for example at a maximum of £2000 for the most expensive route (full inquiry). All fees could be refunded in certain circumstances, such as when an appeal is successful, and there could be lower fees for less complex cases.”

The white paper consultation sought views on:
“a) how the fee could be designed in such a way that it did not discourage developers, particularly smaller and medium sized firms, from bringing forward legitimate appeals;

b) the level of the fee and whether it could be refunded in certain circumstances, such as when an appeal is successful; and

c) whether there could be lower fees for less complex cases.”

This is another area where we await an indication of whether the new ministerial team will take a different approach. Careful note will need to be taken of the Supreme Court’s rulings in Unison and in Heming.
Finally, court fees continue to increase, most recently, from 26 July 2016, by way of the Civil Proceedings, Family Proceedings and Upper Tribunal Fees (Amendment) Order 2016 . The Order’s explanatory memorandum puts it like this:
“The majority of fees affected by this instrument will be increased by a rate which is above the level of inflation. The Government has decided, in view of the financial circumstances and given the reductions to public spending, that such an increase is necessary in order to make sure that the courts and tribunals are adequately funded and access to justice is protected, in the long term.”
In relation to judicial review, the fee levels are still relatively modest compared to some other court procedures but are still significant sums for some claimants to find, particularly at short notice:
– application for permission to apply £154 (previously £140)

– request to reconsider at a renewal hearing £385 (previously £350)

– to proceed to a full hearing if permission is granted £770, or £385 if reconsideration fee already paid (previously £700 and £350)

There is that tired saying about justice in England being open to all, like the Ritz Hotel. It’s true, save that the Ritz doesn’t close its doors for months on end. The court term ends on Monday 31 July (with the next term starting on 1 October).
The end of this term marks the end of an era for the Supreme Court: Lords Neuberger and Clarke are retiring (there is an amusing Legalcheek account of their 28 July valedictory speeches) and Lady Hale will become president (only of the Supreme Court unfortunately rather than of the western world). If only we were to see more blogging from the retired judiciary such as that of Sir Henry Brooke. Do read his recent blog post on a truly surreal Tribunal case.
Simon Ricketts, 29 July 2017
Personal views, et cetera

Aarhus: Caps In The Air Again

The Aarhus Convention requires that access to justice in environmental matters should be “be fair, equitable, timely and not prohibitively expensive”.
Dear patient reader, you will recall that in 2013 the Government introduced a relatively simple mutual costs capping system. It is described in my 19 November 2016 blog post Mending Aarhus, along with a summary of the Government’s response to consultation in 2015 as to proposed changes to the regime to address a number of practical flaws or unfairnesses.
Rule 8(5) of the Civil Procedure (Amendment) Rules 2017 came into force on 28 February 2017, largely implementing the Government’s November 2016 proposals.
The new rules will change the nature of planning litigation in a number of important ways:
1. The procedure was available for judicial review litigation concerning “environmental matters”. The reference to “environmental matters” has been replaced by more specific references to claims within the scope of Articles of the Aarhus Convention that relate to access to environmental information and environmental assessment. Claimants challenging decisions in relation to non-EIA development may now find that they can no longer secure costs protection, even though their claim concerns environmental issues.
2. The procedure is widened from judicial review litigation to include challenges to enforcement notice appeal decisions but, contrary to what the Government has previously indicated, not section 288 planning appeal decision challenges (nor indeed other statutory appeals, for instance in relation to plan making or compulsory purchase orders).
3. The procedure is now only open to “members of the public” as defined in the Aarhus Convention (the Convention defines “the public” as “one or more natural or legal persons, and, in accordance with national legislation or practice, their associations, organisations or groups”). The interpretation will ultimately be for the courts to determine (more unnecessary cost and uncertainty) but in my view this is likely to exclude local authorities and other emanations of the state, including parish councils. The idea of a district or borough council seeking to rely on Aarhus costs capping in a claim against another council has sometimes been bizarre but query whether poor as church mice parish councils should be similarly shut out.
4. Any claimant seeking to have its costs exposure capped will have to file and serve with the claim form a “schedule of the claimant’s financial resources which takes into account any financial support which any person has provided or is likely to provide to the claimant and which is verified by a statement of truth”. It will be crucial, in the short period of time available before the claim is filed and served, to make sure that what is said is both accurate and is not likely to lead the court, on application by the defendant or of its own accord, to increase or remove the caps, having regard to the following principles:
Varying the limit on costs recoverable from a party in an Aarhus Convention claim 45.44.—(1) The court may vary the amounts in rule 45.43 or may remove altogether the limits on the maximum costs liability of any party in an Aarhus Convention claim. (2) The court may vary such an amount or remove such a limit only if satisfied that—
* (a) to do so would not make the costs of the proceedings prohibitively expensive for the claimant; and  

* (b) in the case of a variation which would reduce a claimant’s maximum costs liability or increase that of a defendant, without the variation the costs of the proceedings would be prohibitively expensive for the claimant.  

(3) Proceedings are to be considered prohibitively expensive for the purpose of this rule if their likely costs (including any court fees which are payable by the claimant) either—

(a) exceed the financial resources of the claimant; or

(b) are objectively unreasonable having regard to—

(i) the situation of the parties; (ii) whether the claimant has a reasonable prospect of success;

(iii) the importance of what is at stake for the claimant;

(iv) the importance of what is at stake for the environment;

(v) the complexity of the relevant law and procedure;and

(vi) whether the claim is frivolous.

There are some big uncertainties in these criteria. For example, what are the “financial resources” of the claimant? Is the claimant expected to sell illiquid capital assets (such as his or her home, or cash in his or her pension) to meet a costs award that has a short deadline for compliance? If what is at stake is of great importance to the claimant, for example the loss of his home, should he be prepared to accept a higher cap? Does the claimant have to own up to what he is paying his own lawyer? How detailed must the information be as to financial support received from, for instance, contributors to a litigation fighting fund? Will potential contributors be discouraged from reaching in their pockets?
Is this the end of wealthy litigants, whether corporates or individuals, relying on costs capping? Few surely would have any problem with that (if you embark on litigation, be prepared to meet to the other side’s costs if you lose – someone has to) but will this also kick out the JAMs? Will the big NGOs face difficulties explaining that a cap of more than £10,000 would be prohibitively expensive? Will the uncertainties prevent potential litigants from embarking on proceedings in case they lose protection when it is too late in practical terms to back out?
5. Defendants who unsuccessfully challenge costs caps will no longer face an award of costs on an indemnity basis in relation to their challenge. Surely challenges will be much more frequent – and the threat, in responses to pre-action letters, of challenges to costs caps so as to discourage potential claimants.
6. Any hearing on costs capping issues may be held “in private if it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality”. If hearings are required, which judges seek to avoid on costs cap issues so as not add to the costs burden of the parties, what personal financial information wouldn’t fall into that category?
7. The rules now make clear, in line with case law, that where there are multiple claimants, the £5,000 (for an individual) and £10,000 (for a group) caps apply to each claimant rather than being apportioned between them.
8. The costs capping regime has now been extended to the Court of Appeal but only in the most sketchy way, not materially changing current practice. The Court of Appeal is simply directed to “consider whether the costs of the proceedings will be prohibitively expensive for a party who was a claimant” and “if they will be, make an order limiting the recoverable costs to the extent necessary to prevent this”.
The House of Lords Secondary Legislation Scrutiny Committee has strongly criticised the amended rules: “The MoJ has not provided a convincing case for changing from the previous standardised system of cost capping, which was well understood, to this more complex system which appears to have significant potential to increase both the costs for public administration and the uncapped litigation costs of the claimant”.

Furthermore, in bad timing for the Government, the UN Aarhus Convention Compliance Committee published a report on 24 February 2017, only four days before the amended rules came into force, continuing to express concerns about the operation in England and Wales of costs capping in environmental cases and the changes that were consulted upon in 2015: “with the exception of the proposal to broaden the scope of “Aarhus claims” to include statutory appeals falling within article 9, paragraph 2, of the Convention” [ironically now not fully included as it transpires!] “all proposed amendments would increase rather than decrease uncertainty and risk of prohibitive costs for claimants”.

The compliance of the amended rules with the Convention is heading for the courts, following a judicial review brought by ClientEarth, Friends of the Earth and RSPB.
As both poacher and gamekeeper, what do I think? The 2013 rules have not been working badly but it has been absurd on occasion to see wealthy individuals and substantial companies and groups take advantage of extremely low costs caps in litigation against local authorities that have increasingly tight budgets. What would be wrong in that situation in having a mechanism for doubling or trebling the default £5,000/£10,000 cap, as long as the mechanism can be kept as fast and simple as possible? Balancing simplicity against fairness to all is as always the challenge – and for the developer sitting on the sidelines as an interested party the real devil, as always, is delay.
Simon Ricketts 11.3.17
Personal views, et cetera

NB Invaluable to this piece was first a call from Nicola Gooch at Irwin Mitchell on 28 February, then this good Will Upton blog post and then finally a thought-provoking Francis Taylor Building event presented by Robert McCracken QC, Ned Westaway and Charles Streeten.

Mending Aarhus

On 1 April 2013 the Government changed the Civil Procedure Rules to introduce a system of automatic costs capping for judicial reviews in England and Wales in relation to “environmental matters” (a broad definition that embraces many “planning” JRs). This was to seek to comply with the Aarhus Convention’s principle that access to environmental justice should not be prohibitively expensive. However, surprise surprise, in some ways arguably the Government went further than was necessary and in other ways it didn’t go far enough.
What the system did was to allow claimants to opt for mutual cost capping when bringing a claim. If the claimant ultimately lost, as an individual (however well-resourced) his or her exposure to the successful defendant’s costs would then be capped at £5k and if a company or other body (however well-resourced) its exposure would be capped at £10k. As a quid pro quo, if the claimant won it could only recover up to £35k. The system only applies at first instance – further applications to the court for specific costs protection are required if the case then goes onto the Court of Appeal and beyond to the Supreme Court
The Government brought in the new system ahead of the CJEU giving judgment in Case C 530/11 European Commission v United Kingdom of Great Britain and Northern Ireland (13 February 2014). The CJEU did not address the post 1 April 2013 system but found that the previous regime was indeed non-compliant. Whilst the new system has addressed most of the CJEU’s criticisms, there are certainly still gaps, for example the current restriction of automatic cost capping to judicial review rather than statutory challenges (for instance to appeal decisions by the Secretary of State and inspectors) and the way in which automatic cost capping only applies at first instance.
The Government consulted in 2015 on proposals to amend the automatic cost capping system, partly to seek to comply with the CJEU ruling and partly to tighten up on the process where it could. Particularly contentious elements included proposing that claimants should submit a schedule of their financial resources when commencing the proceedings so as to allow for argument as to whether the cap should be increased in the particular case, a proposal that cost capping should only be confirmed once a claim had received permission to proceed to a full hearing (ie had been ruled to be arguable) and a proposal to double the standard caps to £10,000 (for individuals) and £20,000 for all other categories of claimant.
The Government has now published on 18 November 2016 Costs Protection In Environmental Claims, its response to that consultation document.
It has stepped back from the more contentious proposals. In summary it proposes that the Civil Procedure Rules be amended to:
– extend Aarhus cost capping to statutory challenges engaging EU law based statutes (this would bring to an end the nonsense of the current Venn litigation saga, in which the refusals of first Ouseley J on 15 August 2016 and then Lewison LJ on 3 November 2016 to grant permission for Ms Venn to appeal are worth a read – further background in this Landmark Chambers update).

– give more certainty that there will be costs protection in Court of Appeal cases “where this is necessary to prevent the proceedings from being prohibitively expensive for the claimant”. The Government will invite the Supreme Court to set equivalent rules to apply to appeals that it hears. So not an automatic system for appeals but clearer guidance.

– refine a definition of “members of the public” who are entitled to Aarhus cost capping. I take this as code for removing the ability for local authority claimants to obtain automatic Aarhus cost capping protection, subject to the outcome of the Aarhus Convention Compliance Committee’s consideration as to whether Hillingdon Council, and other local authorities engaged in the judicial review of the Government’s decision to proceed with HS2, qualify for protection under the Convention (following the ruling of the Court of Appeal on 11 March 2015 that they do under the Civil Procedure Rules – which may have been drawn unnecessarily widely).

– allow parties to make applications to reduce or increase the caps in particular cases. The test will be that the costs of proceedings must “neither be subjectively prohibitively expensive (they must not exceed the financial resources of the claimant) nor appear to be objectively unreasonable” (ie that set out by the CJEU in C-260/11 Edwards v Environment Agency (11 April 2013). To make its case, the claimant would need to “provide information on significant assets, income, liabilities and expenditure. This information would take account of any third-party funding which the claimant had received”.

– clarify that where there are multiple claimants, a separate cap applies to each claimant (reflecting incidentally the approach recently taken in R (Birchall Gardens LLP and Tarmac Trading Limited) v Hertfordshire County Council (Holgate J, 4 November 2016)).

The Government does not intend to extend the Aarhus cost capping system to private nuisance cases (the subject of proceedings currently before the European Court of Human Rights: 39714/15 Austin v. UK) or similar non public law cases that raise environmental issues. Nor does it intend to increase the standard caps or to delay cost capping to beyond the permission stage.
James Maurici QC has prepared a useful comparative table of the proposals in the consultation paper and those in the response document.
Whilst the Government seeks to limit the circumstances in which parties can apply to vary costs caps, stressing the risk of costs orders against parties that do so unreasonably, undoubtedly this will lead to additional pre-hearing sparring and uncertainty (which is not to criticise the proposal – it has sometimes been galling to see claimants obtain automatic costs protection at the standard level, when the claimants’ means may be at least equal that of the cash-strapped defendant authority).
In my view the response document seeks to achieve a sensible and reasonable balance and for that reason will no doubt come under attack from all quarters…

Simon Ricketts 19.11.16
Personal views, et cetera

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