Report recommends capping cost of all judicial reviews

The protective costs rules in environmental cases should be adapted and extended to all judicial review claims, Lord Justice Jackson has recommended.

In his Review of Civil Litigation Costs: Supplemental Report Fixed Recoverable Costs the judge said: “Whilst those rules were originally introduced to achieve compliance with the Aarhus Convention, they are in principle suitable for judicial review cases in general, all of which are of constitutional importance. Citizens must be able to challenge the executive without facing crushing costs liabilities if they lose.”

A report was written for the judge by Martin Westgate QC of Doughty Street Chambers on how the Aarhus Rules might be developed for general application across the whole landscape of judicial review.

Lord Justice Jackson wrote that government lawyers were “perhaps unsurprisingly….less enamoured of the idea” and had suggested that there was no access to justice problem which needed to be addressed.

His recommendations were based on his conclusions that:
“(i) Even though many JR cases fall into a standard pattern, costs are too variable to permit the introduction of a grid of FRC [fixed recoverable costs].
(ii) CCOs [costs capping orders] are of little practical value, because the procedure for obtaining such orders is too cumbersome and too expensive. The criteria for granting CCOs are unacceptably wide and the outcome of any application must be uncertain. Also, that outcome will not be known until too late in the day.
(iii) There would be merit in extending the Aarhus Rules, suitably amended, to all JR claims. The fact that most JR cases fall into a standard pattern makes it possible to set default figures as caps, even though it is not practicable to draw up a grid of FRC.
(iv)The discipline of costs management should be available in larger JR claims, at the discretion of the court.”

Lord Justice Jackson went on: “I accept that it is both tiresome and expensive for hard pressed public authorities to face (as they do) (a) a stream of unmeritorious claims and (b) and a much smaller number of meritorious claims. The fact that most claims are knocked out at the permission stage is not a complete answer. By then the defendant authorities will often have incurred significant costs in investigating the facts and drafting the acknowledgement of service.

“Despite those unwelcome burdens falling on public authorities, the ready availability of JR proceedings in which public bodies are held to account for their actions and decisions, is a vital part of our democracy. Both JR and a free press are, in their different ways, bulwarks against the misuse of power.”

Under the proposal:

The regime should be available in any case where the claimant is an individual (or an individual who is a representative of a number of natural persons with a similar interest) without legal aid.
The regime should be optional. Any judicial review claimant should be able to opt in.
There must be some form of means testing for those claimants who opt in.
Any investigation of means should be in private and the claimant’s disclosure should be made only to specified individuals within a defined confidentiality ring.
The default figures of £5,000/£10,000 for claimants and £35,000 for defendants should remain, but be subject to three yearly reviews.
Any application to vary those figures should be made by the claimant in the claim form and by the defendant in the acknowledgement of service. Such applications should be dealt with at the permission stage. Such applications should only be entertained later in exceptional circumstances, for example a fundamental change in the case or the discovery of dishonesty in the claimant’s disclosure.
If the claimant’s costs liability is increased above the default figure, they should be permitted to discontinue within 21 days and (if they do) only be liable for adverse costs to the extent of the previous figure.
Lord Justice Jackson argued that the fact that the defendant would not normally be liable for more than £35,000 in costs would protect the public purse against open-ended liability.

“The opportunity to vary the default figures at an early stage provides (a) an additional opportunity for claimants to secure access to justice, as well as (b) an opportunity for defendants to protect the expenditure of taxpayers’ money in litigation brought by wealthy claimants,” he added.
Lord Justice Jackson said the proposals could not be made by rule change alone, and legislation would have to be amended or repealed.

The judge also called for costs management to be introduced, at the discretion of the judge, in ‘heavy’ judicial review claims.
He proposed that in any judicial review case where the costs of a party were likely to exceed £100,000 or the hearing length was likely to exceed two days, the court should have a discretion to make a costs management order at the stage of granting permission.

Lord Justice Jackson rejected the courts being given a discretion to override agreed judicial review budgets.

“Both public authorities and claimants must be assumed to act rationally,” he said. “The defendants have a duty to conserve taxpayers’ money. Claimants and interested parties have their own commercial interests to protect. It would be a waste of scarce judicial time for judges to pore over the details of agreed budgets in JR cases.”

Elsewhere in his report the judge recommended a grid of fixed recoverable costs (FRC) for all fast track cases. Above the fast track, he called for a new ‘intermediate’ track for certain claims up to £100,000 which can be tried in three days or less, with no more than two expert witnesses giving oral evidence on each side. This intermediate track will have streamlined procedures and a grid of FRC.” …