Court of Appeal clarifies the scope of unsuccessful parties' liability for pre-permission costs in statutory review and judicial review claims
Campaign to Protect Rural England – Kent Branch v Secretary of State for Communities and Local Government  EWCA Civ 1230
The Court of Appeal has confirmed that, where permission to seek statutory or judicial review is refused, a claimant can be liable for the costs of more than one defendant or interested party.
The Court of Appeal also clarified that the costs of interested parties in statutory and judicial review cases concerning environmental matters under the Aarhus Convention are not outside the scope of the Aarhus costs cap, so that a claimant's costs liability under an Aarhus cap can include costs incurred by an interested party.
The Secretary of State for Communities and Local Government determined that the local plan of Maidstone Borough Council was "sound", subject to modifications, under section 20(5) of the Planning and Compulsory Purchase Act 2004. Maidstone Borough Council decided to adopt the plan and Campaign to Protect Rural England sought a statutory review of that decision. The Secretary of State was named as the first defendant, Maidstone Borough Council was named as the second defendant and a promoter of a development within the plan was named as an interested party.
Each of the defendants and the interested party filed an Acknowledgement of Service and summary grounds disputing the claim. The claimant requested that its costs liability be limited to £10,000 under the "Aarhus" costs protection regime in Rule 45 of the Civil Procedure Rules. This costs protection regime applies to certain judicial and statutory review cases relating to environmental matters within scope of the UN Economic Commission for Europe's Aarhus Convention.
The High Court accepted that the case was subject to the Aarhus cap but refused the claimant's application for permission to proceed with the case. The claimant was ordered to pay costs to the Secretary of State, Maidstone Borough Council and the interested party, which collectively reached the £10,000 limit under the Aarhus cap.
In the claimant's appeal against the £10,000 costs order, the issues for the Court of Appeal were:
- whether an adverse costs order in favour of multiple defendants and interested parties could be made in a statutory or judicial review application which failed at the permission stage; and
- the proper application of the Aarhus cap on the total costs liability in such a case.
A claimant's liability for multiple parties' costs
The Court of Appeal confirmed that:
- when permission to seek judicial or statutory review is refused, a claimant may be liable to more than one defendant and/or interested party for their costs of preparing and filing their Acknowledgement of Service and summary grounds of dispute;
- it is not necessary for the additional defendant(s) and/or interested party to show exceptional or special circumstances in order, in principle, to recover their costs; but
- to be recoverable, the costs must be reasonable and proportionate.
In relation to the reasonableness and proportionality of parties' costs, the court stated: "where a judge has two sets of summary grounds of dispute, he or she will consider the utility of each and the extent to which one defendant should have anticipated the points raised by another, so as to make proportionate costs orders. The costs of an entirely duplicatory set of summary grounds produced by what is clearly not the principal defendant may not be proportionate and may therefore not be recoverable".
The court also made clear that, in cases which are subject to the Aarhus cap, a court should not "nod through" claims for costs that are below the cap. The costs claimed must still be reasonable and proportionate, and should be subject to scrutiny by the court.
The Aarhus cap
The Court of Appeal held that the Aarhus cap applies to cases with more than one successful defendant or interested party, in the same way that it applies to cases with one defendant. The purpose of the cap is to limit the overall costs liability of the claimant.
The court rejected an argument by the claimant that the Aarhus cap should be lowered where the claim fails at the permission stage rather than at the substantive hearing. The court held that the cap applies to all of the costs incurred by the successful defendant or interested party, regardless of the stage at which those costs fell to be assessed.
The Court of Appeal dismissed the appeal and upheld the costs order.
Neither of the defendants received a deduction of the costs that they claimed, but the costs awarded to the interested party under the cap were less than its claimed costs. The Court of Appeal observed that the interested party was "not a defendant and had a greater freedom to choose the extent to which they were involved in the challenge at the permission stage". Interested parties should be alive to this point when considering the extent of their involvement in the permission stage of Aarhus Convention claims.
The case provides useful clarification of the scope of unsuccessful parties' liability for pre-permission costs in statutory and judicial review claims involving multiple parties, and on the application of the Aarhus cap in such claims. If you are a claimant in a judicial or statutory review involving more than one defendant and/or an interested party, you must be prepared to pay multiple sets of costs in the event that permission to progress the claim is refused. If you are a defendant or interested party, you must be able to demonstrate that costs incurred are reasonable and proportionate, including by ensuring that summary grounds submitted are not duplicative of arguments advanced by other parties.