Protected costs order (PCO) – Judicial review – Order restricting costs recoverable by respondent if appellant’s claim failing – Similar cap placed on appellant’s recovery of costs from defendant if successful – Whether appropriate to apply reciprocal cap – Whether PCO protection to be extended to appeal – Appeal dismissed – Application granted
The appellant charity was set up to protect invertebrate species. In 2007, it applied for permission for a judicial review of the respondents’ decision to grant planning permission to the interested party for a distribution hub in West Thurrock. The appellant argued that the development would destroy 50% of invertebrate habitats and cause extinctions on a nationally important site. The initial application was refused, but on a renewed application an order was made for a rolled-up hearing to determine both the question of permission and the substantive claim. The matter was expedited at the request of the interested party. The judge allowed the appellant’s application for a protected costs order (PCO), placing an upper limit of £10,000 on its costs liability to the respondents should it lose; he also applied the same cap to the costs recoverable by the appellant if it were to win.
At a hearing in 2008, the appellant’s application for judicial review was dismissed and it was ordered to pay the respondents’ costs, limited to £10,000. Permission to appeal was subsequently granted on public interest grounds. Prior to the hearing of the substantive appeal, the appellant made further applications for: (i) an order, by way of appeal, varying the order made below so as to remove the £10,000 cap on the costs recoverable against the respondents; and (ii) an extension of its own costs protection to the proceedings before the Court of Appeal.
Held: The appeal was dismissed; the application was granted.
(1) In order to be suitable for a PCO, a case had to be a “public interest case” in which the issues raised were of general public importance and the public interest required those issues to be resolved, although those two tests might be difficult to separate: R (on the application of Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192; [2005] 1 WLR 2600 and R (on the application of Compton) v Wiltshire Primary Care Trust [2008] EWCA Civ 749 applied. The approach to PCOs should not differ in cases that raised environmental issues from those that raised other serious issues. There was no principle of exceptionality imposing additional criteria to those set out elsewhere in Corner House. Whether a case raised matters of general public importance was a question of degree for the judge to resolve by reference to all the circumstances of the case.
The claimant should expect that, if it won, the costs recoverable from the defendant would be restricted to a reasonably modest amount, although there was no absolute rule that costs should be limited to those of instructing junior counsel only: Corner House applied. Where a PCO was made in favour of a claimant, a corresponding order capping the defendant’s liability for costs might be appropriate, although there was no assumption that the two caps should be in the same amount. There was no basis for interfering with the order made by the judge in the instant case. Further, it was just to limit the appellant’s costs liability in the appeal to £10,000; the respondents’ liability would be capped in the same sum.
(2) The parties in the instant case had not followed the appropriate procedure for seeking a PCO. This should normally be done on the initiating claim form, and a defendant wishing to resist such an order, or seeking a reciprocal cap, should make its case in its acknowledgement of service: Corner House applied. If the parties were dissatisfied with the judge’s decision, they should have sought a reconsideration at an oral hearing. However, judges’ decisions on PCOs should not be revisited save in exceptional circumstances, and in the rare case where it was necessary to have an oral hearing, it should last a short time, as contemplated in Corner House, and take place in good time before the hearing of the substantive application for judicial review so that the parties would know their positions regarding their potential liability for costs in advance of incurring those costs.Similar considerations applied to the Court of Appeal. There was an overlap between the issues of whether to grant permission to appeal and whether to grant a PCO, since both involved some consideration of the merits. It was important that issues relating to permission to appeal and to PCOs and consequent costs capping orders should be put before the court for consideration on paper at the same time, so as to avoid further hearings of the kind that had taken place in the instant case.
Michael Fordham QC and Emma Dixon (instructed by Richard Buxton, of Cambridge) appeared for the appellant; Timothy Straker QC and Caroline Bolton (instructed by Berwin Leighton Paisner LLP) appeared for the respondent; Reuben Taylor (instructed by Wragge & Co) appeared for the interested party.
Sally Dobson, barrister
