The Jackson Review is intended to address the significant financial risks that come with bringing a case in UK courts. ClientEarth lawyer Sandy Luk explains why it has missed the target for environmental cases.
Lots of individuals and organisations work untiringly to protect and improve the environment – a task now probably more needed than ever. At ClientEarth we try to help with this task by analysing and using the law. For us, the ability to ensure that our environment is protected is fundamental for a working democracy. In many countries, the law agrees. In the US, environmental laws can be enforced by government agencies, but also by the public who can act as a private attorney general. The Aarhus Convention, an international law signed by the EU and many of the EU’s member states including the UK, agrees too. In fact, the Aarhus Convention guarantees the public certain rights relating to the environment: access to environmental information, participation in environmental decision-making and access to the courts where laws regarding the environment are broken.
The UK also agrees – at least in theory. In its reports on how the Convention has been implemented here, the UK says that it complies with its international obligations. However, the position in practice is different, particularly in relation to access to the courts. English law is relatively generous in giving the public (and environmental organisations) ‘legal standing’, i.e. the right to bring cases against public authorities. However, it does not, other than in extreme cases, allow the public to challenge whether public authority decisions were actually right or wrong. It imposes unfair time limitations for bringing cases. Most importantly, it comes with the threat of vast and uncertain costs to anyone who tries to bring a case and loses.
This is illegal under the Aarhus Convention. Prohibitive costs are not allowed, and access to justice rules have to be fair.
In January, Lord Justice Jackson published a review of the entire system of civil litigation in England & Wales. The Jackson Review does not make separate recommendations in relation to environmental cases in spite of their special characteristics, but makes a more general recommendation to introduce a system of what the report calls ‘qualified one way costs shifting’.
On the plus side, the Jackson Review confirms that one way costs shifting would be the simplest way for the UK to comply with the Aarhus Convention.
On the negative side, the proposed rule is a ‘qualified’ one that takes account of a party’s financial resources, which may justify the old ‘loser pays’ rule being applied after all. The Jackson Review claims that this rule will give legally aided and similar parties (who are of ‘modest means’) costs protection, but will force ‘conspicuously wealthy’ parties to pay. Although this sounds reasonable, it does not in any way resolve the problem of prohibitive costs. The wording of the proposed rule and the interpretation of what constitutes ‘reasonable’ costs according to court cases so far do not support the claim that there will be effective costs protection, and Lord Justice Jackson gives no indication of what ‘reasonable’ may mean in this context, or at what level costs should be capped by reference to the resources of persons of modest means.
Most importantly – and regardless of how the suggested rule is interpreted in the end – even with the rule proposed in the Jackson Review, there would continue to be a great deal of discretion in judges’ costs awards, prohibitive costs awards would still be possible, and there would still not be any certainty as to the amount of costs potential claimants in environmental public interest cases would need to pay if they lost.
This would still be in breach of the Aarhus Convention, so that, whatever the ultimate judicial interpretation and judicial practice in relation to the proposed rule on ‘qualified’ one way costs shifting may be, if Lord Justice Jackson’s proposed wording is introduced into English law, then the UK will continue to be in breach of the Aarhus Convention.
In relation to nuisance cases (private law rights relating to the enjoyment and use of your land, for example through smells or pollution from a neighbouring factory) the Jackson Review does not even advocate qualified one way costs shifting, although it is mentioned as a possibility. Instead it suggests that more householders should to take out before-the-event legal insurance (BTE insurance), with a higher level of cover (Lord Justice Jackson suggests £100,000 as sufficient). In the event of a potential claimant not having BTE insurance, he suggests the use of success fees to be paid out of increased damage awards (he suggests a ten per cent increase).
However, neither insurance nor the actually very limited damages, if any, available in nuisance claims would make the English costs system in relation to environmental claims fairer or reduce the prohibitive cost or the uncertainty in relation to the amount of potential adverse costs orders that can be expected.
Therefore, none of the Jackson Review’s recommendations are capable of achieving UK compliance with Article 9(4) of Aarhus Convention in relation to environmental nuisance cases.
What’s more, whether or not a claimant has taken out insurance cannot and does not determine whether costs are prohibitive or not. The fact that insurance may be available to cover (some of the potential) costs does not make prohibitive costs less prohibitive. In addition, putting on householders the certain (financial) burden of protecting themselves against uncertain potential adverse costs orders in relation to unknown potential future nuisance claims, which are actually in the public interest, is unfair.
Clearly, therefore, this recommendation would not help the UK to comply withthe Aarhus Convention either.
ClientEarth strongly supports true one way costs shifting in relation to environmental cases, as applied in the US, for example.
However, even though the Jackson Review claims, in relation to both judicial review and nuisance cases, that the recommendations it makes would enable the UK to comply with its obligations under the Aarhus Convention, we do not think that this would be the case. Neither ‘qualified’ one way costs shifting as proposed in the Jackson Review, nor additional insurance and possible increased damages to cover success fees, would address the fundamental failings of the UK system regarding the costs of environmental cases with respect to the Aarhus Convention.
In 2008, ClientEarth sent a ‘communication’ to the Aarhus Convention’s Compliance Committee arguing that the UK is in breach of its international obligations. The Jackson Review could have presented a real opportunity to steer the UK in the right direction, but its recommendations would not change the system for the better (if anything it would probably get more difficult for environmental organisations, for example).
It is our hope now, that the Aarhus Convention Compliance Committee will recommend the necessary changes to be made to the costs rules of England & Wales in relation to environmental cases.