Is the Aarhus costs regime EU law compliant?
Environmental lawyer Carol Day discusses the implications of recent ECJ cases
Posted on 05 March 2014
The Ministry of Justice probably weren’t smiling when they introduced a new costs regime for environmental cases on 1st April last year. Amidst savage cuts in public funding and relentless (and ongoing) efforts to undermine Judicial Review (JR), the UK was forced to effect changes to the Civil Procedure Rules to ensure that JR was not “prohibitively expensive” (PE) for claimants in line with the access to environmental requirements of the Aarhus Convention (1) (ratified by the UK in 2005) and EU law (2) . The Aarhus regime limits the claimant’s liability for adverse costs to £5,000 for individuals and £10,000 for groups – but also imposes a cross-cap (limiting the amount a successful claimant can claim from a public body) of £35,000.
In 2005, a Coalition of environmental NGOs (3) lodged a complaint with the European Commission alleging that individuals and civil society groups were unable to pursue cases in the UK courts because of the high costs of legal action and, specifically, the application of the “loser pays rule”, which requires the losing party to cover the legal costs of the winning party – thus routinely exposing claimants to tens of thousands of pounds of legal costs. The same Coalition also acted as an Amicus to the Aarhus Convention Compliance Committee in proceedings against the UK concerning costs, which resulted in a finding of non-compliance with the access to justice provisions of the Convention.
The European Commission referred the case to the European Court in 2011 and, following the Advocate General’s Opinion in Autumn 2013 (4) , the full Court delivered its judgment in Case C-530/11 (Commission v UK) on 13th February 2014 (5) . The UK almost comprehensively lost - as may have been expected following the CJEU’s judgment in parallel proceedings on prohibitive expense referred to it by the UK Supreme Court in 2012 (6) . With the completion of the proceedings in Edwards and the UK infraction case, it is now possible to assess whether the Aarhus costs regime in England and Wales (and similar schemes in operation in the devolved administrations) are EU law and Aarhus compatible.
The main findings of the cases can be summarised as follows:
The CJEU did not feel it had enough evidence before it to rule on the legality of cross caps – although it has left the door open for a future date. Moreover, Advocate General Kokott’s Opinion makes it clear that whilst reciprocal caps may be acceptable in private law cases, they reinforce the inequality of arms existing in public law cases and, as such, may be unlawful (7) .
Whilst the present regime addresses many of these points, there are strong arguments to suggest that further refinements to the CPR are necessary. Firstly, the Rules do not clarify that there must be scope for the figures of 5k and 10k to be reduced in order to ensure the costs are not PE for claimants of patently limited means (the subjective evaluation). Conversely, it must be clear that the figures cannot be increased in order to ensure certainty as to costs liability and stay within the bounds of what is objectively reasonable. Similarly, the Rules are silent on the issue of appeals, so guidance will be necessary in order to ensure that in evaluating PE, appeal courts consider the liability faced by claimants at earlier stages of the proceedings.
The infraction proceedings also discussed the UK system of legal aid. In holding that “associations must also be protected against prohibitive costs”, AG Kokott raises an interesting question as to whether Non-Governmental Organisations (NGOs) should be eligible to apply for it – a point made directly to the UK Government at the most recent meeting of the Aarhus Task Force on Access to Justice in Geneva in February 2014.
The devolved administrations have dealt with the issue of costs in different ways, to the extent that some parts of the UK are more compliant than others. The UK as a whole is no doubt considering the extent to which the regimes are Aarhus compliant in the run up to the next Meeting of the Parties to the Aarhus Convention in Maastricht (Brussels) in June and July 2014. UK NGOs will be there in force to keep up the pressure. Similarly, the UK continues to be the Aarhus Convention Compliance Committee’s “best customer”, with imminent hearings on the applicability of the Convention to costs in private law cases (8) . The change in pace to the law in relation to environmental cases looks set to continue for some while yet.
In 2005, a Coalition of environmental NGOs (3) lodged a complaint with the European Commission alleging that individuals and civil society groups were unable to pursue cases in the UK courts because of the high costs of legal action and, specifically, the application of the “loser pays rule”, which requires the losing party to cover the legal costs of the winning party – thus routinely exposing claimants to tens of thousands of pounds of legal costs. The same Coalition also acted as an Amicus to the Aarhus Convention Compliance Committee in proceedings against the UK concerning costs, which resulted in a finding of non-compliance with the access to justice provisions of the Convention.
The European Commission referred the case to the European Court in 2011 and, following the Advocate General’s Opinion in Autumn 2013 (4) , the full Court delivered its judgment in Case C-530/11 (Commission v UK) on 13th February 2014 (5) . The UK almost comprehensively lost - as may have been expected following the CJEU’s judgment in parallel proceedings on prohibitive expense referred to it by the UK Supreme Court in 2012 (6) . With the completion of the proceedings in Edwards and the UK infraction case, it is now possible to assess whether the Aarhus costs regime in England and Wales (and similar schemes in operation in the devolved administrations) are EU law and Aarhus compatible.
The main findings of the cases can be summarised as follows:
- EC Directives must be transposed in a clear and precise manner and claimants in environmental cases must have certainty as to the costs liability they face at the outset;
- Costs means all the costs a claimant faces, including own legal costs and costs arising from a requirement to provide a court with a cross-undertaking in damages in order to secure interim relief;
- The assessment of PE cannot be made in relation to the “average” claimant as they may have nothing in common with the case in question;
- The evaluation of what is PE for a claimant requires both an objective and subjective assessment. Costs must not be “objectively unreasonable” - but neither may they exceed the financial resources of the person concerned;
- In assessing what is subjectively reasonable, a number of other factors can be taken into account by the court, including: (i) whether the case has reasonable prospects of success; (ii) what is at stake for the claimant and the protection of the environment; and (iii) the complexity of the law and relevant procedure; and
- The assessment of PE does not differ at first instance or at appeal.
The CJEU did not feel it had enough evidence before it to rule on the legality of cross caps – although it has left the door open for a future date. Moreover, Advocate General Kokott’s Opinion makes it clear that whilst reciprocal caps may be acceptable in private law cases, they reinforce the inequality of arms existing in public law cases and, as such, may be unlawful (7) .
Whilst the present regime addresses many of these points, there are strong arguments to suggest that further refinements to the CPR are necessary. Firstly, the Rules do not clarify that there must be scope for the figures of 5k and 10k to be reduced in order to ensure the costs are not PE for claimants of patently limited means (the subjective evaluation). Conversely, it must be clear that the figures cannot be increased in order to ensure certainty as to costs liability and stay within the bounds of what is objectively reasonable. Similarly, the Rules are silent on the issue of appeals, so guidance will be necessary in order to ensure that in evaluating PE, appeal courts consider the liability faced by claimants at earlier stages of the proceedings.
The infraction proceedings also discussed the UK system of legal aid. In holding that “associations must also be protected against prohibitive costs”, AG Kokott raises an interesting question as to whether Non-Governmental Organisations (NGOs) should be eligible to apply for it – a point made directly to the UK Government at the most recent meeting of the Aarhus Task Force on Access to Justice in Geneva in February 2014.
The devolved administrations have dealt with the issue of costs in different ways, to the extent that some parts of the UK are more compliant than others. The UK as a whole is no doubt considering the extent to which the regimes are Aarhus compliant in the run up to the next Meeting of the Parties to the Aarhus Convention in Maastricht (Brussels) in June and July 2014. UK NGOs will be there in force to keep up the pressure. Similarly, the UK continues to be the Aarhus Convention Compliance Committee’s “best customer”, with imminent hearings on the applicability of the Convention to costs in private law cases (8) . The change in pace to the law in relation to environmental cases looks set to continue for some while yet.
[2] The 2003 EC Public Participation Directive effected changes to EC Directives on Environmental Impact Assessment (EIA) and Integrated Pollution Prevention and Control (IPPC), requiring legal review procedures in respect of them to be “fair, equitable, timely and not prohibitively expensive”, in line with Article 9(4) of the Aarhus Convention.
[3] The Coalition for Access to Justice for the Environment (CAJE), comprising WWF, Friends of the Earth, RSPB, Greenpeace, CPRE, Environmental Law Foundation and the Living Spaces Project
[4] Advocate General Kokott’s Opinion available here:
[5] Full judgment available here:
[6] See Case C-260/11 (The Queen, on the application of David Edwards and Lilian Pallikaropoulos v Environment Agency and Others) available at:[7] See paragraph 80
[8] See Communications 85 and 86 on the UNECE Website