Update | Judicial review

In the Review of Civil Litigation Costs: Final Report, published in December 2009, Lord Justice Jackson emphasised that his recommendations were: “a coherent package of interlocking reforms, designed to control costs and promote access to justice.” Regrettably, in relation to judicial review, the government has chosen to ignore Jackson’s statements that the reforms must be implemented as a whole. Instead it has cherry-picked those parts of the proposals which favour defendants and ignored the counter-balancing proposals designed to ensure continued access to justice for those affected by the unlawful acts and omissions of public bodies.

For judicial review, the interlocking package in the Final Report was that: (i) there should be a stronger presumption that successful claimants should be awarded costs; (ii) that unsuccessful claimants should not in general have to pay their opponent’s costs (i.e. qualified one-way costs shifting (QOCS)); but, (iii) claimants’ success fees and after-the-event (ATE) insurance premiums should cease to be recoverable from opponents.

By contrast, what has actually happened is that: proposal (i) has been ignored by the government (but implemented by the Court of Appeal in any event: see Bhata and M below); proposal (ii) has been ignored by the government (whether it will be implemented by the courts in any event remains to be seen: see below); and proposal (iii) has been adopted: see ss.44 & 46 of LASPO which are expected to come into force next year.

Justice denied

Historically, ATE insurance has been difficult to obtain in judicial review claims. However, the non-recoverability of success fees presents very real problems for judicial review claimants. One of the complaints about success fees for personal injury cases is that they are claimed even though the risk in many personal injury cases is very low: good PI lawyers can pick winners with a high degree of certainty and in PI cases, costs always follow the event. By contrast, judicial review is highly unpredictable and there are many situations where a win does not result in an inter partes costs order.

In addition, while in PI and other damages claims lawyers will have the option of recovering the success fee from the client’s damages (subject to a 25 per cent cap), most judicial review claimants seek declarations and mandatory orders rather than damages. The blow of ss.44 and 46 of LASPO for personal injury claimants is also cushioned by the introduction of QOCS, but there are at present no plans for QOCS to be introduced for judicial review.

In relation to judicial review, in the Final Report, Jackson said: “I am quite satisfied that qualified one way costs shifting is the right way forward”. However, the MOJ’s May 2011 decision document, Reforming Civil Litigation Funding and Costs in England and Wales, stated: “While Sir Rupert suggested that QOCS might be considered for introduction in some non-personal injury claims, the government is not persuaded that the case for this has been made out at this stage. CFAs are very much a minority form of funding in these claims, and rolling out QOCS to these cases would distort the market by imposing substantial changes on all cases in a particular category of proceedings for a small number of claimants. The government will examine the experience of QOCS in personal injury claims before considering whether it should be extended further.”

However, the reason CFAs are a minority form of funding for judicial review is because of the risk of substantial adverse costs orders, which means that under the current system there is access to justice only for the very rich (who do not need CFAs) or the very poor (who use legal aid and, therefore, have the benefit of s.11 Access to Justice Act 1999 costs protection). So when the MOJ complains that introducing QOCS would “distort the market”, what they really mean is that QOCS would for the first time open up access to the Administrative Court to people of modest means and that that is not an outcome that is acceptable to this government.

As a result, judicial review claimants are entitled to feel that they have been dealt with particularly unjustly by these reforms. After all, these were reforms driven primarily by concerns about excessive costs in areas such as PI and defamation. By contrast, Jackson had concluded that no major reforms were needed to bring down judicial review costs; instead, he said that the “crucial question” in relation to judicial review was the allocation of those costs between the parties and that: “it is not in the public interest that potential claimants should be deterred from bringing properly arguable judicial review proceedings by the very considerable financial risks involved.”

And what about the legal aid reforms? Thankfully, judicial review is not one of the many areas of law being taken out of scope of the legal aid scheme. However, the reductions in the already very low means-threshold will result in fewer people being entitled to legal aid. In addition, the MOJ is currently preparing secondary legislation aimed at tightening the current merits criteria and giving the MOJ a greater role in determining individual funding applications. All of which will mean a growing pool of people for whom CFAs offer the only realistic way of funding judicial review litigation.

Judicial solutions

One piece of positive news among this gloom is in relation to Jackson’s proposal that there should be a stronger presumption that a successful claimant should receive their costs. The MOJ ignored this proposal. However, in R (Bhata & others) v Secretary of State for the Home Department [2011] EWCA Civ 895 and M v LB Croydon [2012] EWCA Civ 595 the Court of Appeal has implemented Lord Jackson’s proposal using its broad CPR 44.3 costs discretion. As a result, the position now is that: “where … a claimant obtains all the relief he seeks, whether by consent or after a contested hearing, he is undoubtedly entitled to all his costs, unless there is a good reason to the contrary” and a good reason to the contrary will be unlikely to include a defendant’s assertion that it has provided the relief sought for reasons unrelated to the claim, or that it has done so as a pragmatic step to avoid incurring further costs in the litigation rather than because it accepts that the claim has merit (see paragraphs 59 & 61 of M v LB Croydon).

Bhata and M address one of the barriers to using CFAs for judicial review claims; however, there are still major problems. First, unlike many of the other pre-action protocols (for example PI and disrepair), the judicial review protocol still does not provide that where a claimant obtains all the relief she seeks through the protocol she is entitled to her costs. Given that judicial review claims are heavily front-loaded and that many claims are resolved at the pre-action stage, this rules out the use of CFA funding for this initial work (because if a CFA-funded judicial review claim succeeds at the pre-action protocol stage the lawyers receive no remuneration).

Second, Bhata and M do not address directly the significant adverse costs risk faced by any non-legally aided judicial review claimant as a result of the MOJ’s refusal to introduce qualified one way costs shifting. However, Bhata and M do serve as an important reminder of the courts’ ability to develop its own solution where the government fails to act to ensure effective access to justice – particularly where that failure to act is explained in part by the government having a clear conflict of interest (i.e. given that judicial review is one of the key checks on the powers of the executive).

One of the best illustrations of this is the development of Protective Costs Orders, a judicially-developed mechanism whereby the court pre-emptively caps a claimant’s exposure to inter partes costs so as to ensure that claimants are not deterred from bringing public interest and environmental judicial reviews by the risk of having to pay tens of thousands of pounds in costs if they lose.

For environmental law challenges, the development of PCOs has been driven in large part by the UN Convention on Access to Information, Public Participation and Access to Justice in Environmental Matters, better known as the Aarhus Convention. The evolution of the judicial guidance on PCO availability means that PCO protection is now available in most environmental law judicial review claims (see Morgan v Hinton Organics (Wessex) Ltd [2009] EWCA Civ 107 and R (Garner) v Elmbridge BC [2010] EWCA Civ 1006). And while the MOJ has recently restated its position that QOCS is unnecessary to ensure the UK’s compliance with the Aarhus Convention (a position disputed by Lord Justice Sullivan’s committee on access to environmental justice), it now appears that MOJ will introduce a codified PCO regime for all environmental claim (see the MOJ consultation paper Cost Protection for Litigants in Environmental Judicial Review Claims, October 2011).

As for non-environmental law claims, at present the judicially developed guidelines in R (Corner House) v Secretary of State for Trade and Industry [2005] 1 WLR 2600 suggest that PCOs should be granted only in cases of wider public importance. However, there is nothing to prevent the court from responding to the access to justice difficulties created by the government’s refusal to implement in full Jackson’s “package of interlocking reforms” by relaxing the Corner House criteria – or by choosing to exercise prospectively the court’s broad CPR 44.3 discretion so as to provide costs protection for claimants (for example, see Davey v Aylesbury Vale DC [2007] EWCA Civ 1166: “21….a claim brought partly or wholly in the public interest, albeit unsuccessful, may properly result in a restricted or no order for costs.“)