Wed, 17 Sep 2014
By Jenny Wigley
The Criminal Justice and Courts Bill, which introduces significant changes to judicial review, is making rapid progress through Parliament. The House of Lords Committee stage completed on 30 July 2014 and all that remains now is the House of Lords report stage due at the end of October, with royal assent expected by the end of the year. Whilst there are indications that certain members of the Lords disagree with some of the provisions and some may yet be amended or frustrated, the current version of the Bill retains the significant provisions on judicial review.
Part 4 of the Bill contains a number of important changes to be introduced which seek, in the words of the Lord Chancellor, to prevent judicial review from being a “brake on growth”. The Government’s aim of reducing judicial review claims continues to be pursued: The financial measures in the Bill are intended to deter would be claimants by increasing the financial risks on those seeking judicial review. In summary, those financial measures, set out in the up to date version of the Bill (as amended in HL Committee in July), include the following:
- An amendment to s.31 of the Senior Courts Act 1981 and s.16(3) of the Tribunals, Courts and Enforcement Act 2007 requiring applicants for judicial review to reveal at the outset how their claim is being funded and the resources available from others behind the scenes, including, in the case of companies with insufficient resources, their members;
- A requirement on the Court to consider making orders for costs against third parties who are providing financial support to claimants or who are likely to be able to do so;
- A rule that other parties may not be ordered to pay a third party intervener’s costs other than in exceptional circumstances;
- A rule that third party interveners in judicial review claims be liable for their own costs and the costs of the other parties that arise from their intervention, other than in exceptional circumstances;
- Restriction on the Court’s ability to make protective costs orders (“PCO” – that is an order limiting a claimant’s exposure to liability to pay the other side’s costs if unsuccessful, sometimes referred to as “cost capping” orders) to only after leave to seek judicial review has been granted; and only where a claimant would otherwise withdraw the claim and would be acting reasonably in doing so.
This latter measure relating to “cost capping” could have very serious consequences, preventing many “public interest cases” from coming to Court. If the Court is restricted from making a PCO until after permission to seek judicial review has been granted, the risks of bringing a claim for an impecunious claimant in a public interest case could well be intolerable. This is because a public body defendant can, and often does, run up very significant costs at the permission stage, costs that the claimant could be liable for if unsuccessful.
These serious consequences are magnified by the restrictions on legal aid and could be magnified further if the Government carries out its plans to amend the Civil Procedure Rules to enable Courts to make costs awards against unsuccessful claimants at permission application renewal hearings on a routine basis rather than only in exceptional circumstances. The Government proposes to amend paragraph 8.6 of Practice Direction 54A which states that where a defendant attends a renewal hearing, an award of costs will not generally be made against an unsuccessful claimant. As yet, no amendment has been introduced and the Government’s proposal has been criticised by the parliamentary Joint Committee on Human Rights which recommends that any change should be “even handed” between the claimant and defendant at the permission hearing, so that whoever is unsuccessful pays the other party’s costs, irrespective of the final outcome of the case. This approach is also supported by the Bingham Centre report.
However, even if the latter “even handed” amendment is made, it is plain that there would be an additional significant costs risk at the permission hearing stage which is likely to seriously restrict the ability of claimants of modest means to bring public interest cases unless the proposed restriction preventing the grant of protected costs orders until after permission has been granted is dropped from the Bill.
The other provisions relating to PCOs include that the Court would be required to have regard to the financial information provided at the outset and would only be able to make a PCO in more narrowly defined “public interest cases” and only where a claimant would otherwise withdraw the claim and would be acting reasonably in doing so. In deciding whether a case is a “public interest” case, regard is to be had to the number of people likely to be affected by the outcome, the significance of that effect and whether a point of law of general public importance is involved. Whilst these provisions codify, albeit restrictively, the common law principles as set out in Corner House, as modified in R (Compton) v. Wiltshire Primary Care Trust  1 WLR 1436 and most recently in R (o a o Plantagenet Alliance Ltd) v. Secretary of State for Justice and others  EWHC 3164 (Admin), they do go further. In addition to restricting PCOs until after permission for judicial review has been granted (already discussed), they allow the Lord Chancellor to amend by Regulations the matters to which the Court is to have regard when considering whether a case is a “public interest” case. They also require that any PCO that is made be on reciprocal terms, in other words the Court is required to also impose a reciprocal cap on the defendant’s liability for the claimant’s costs meaning that a defendant would be protected to some specified degree from an adverse costs claim from the claimant, should the claim succeed.
Ostensibly these proposals on PCOs cut across the Aarhus Convention and the new rules in the Civil Procedure Rules relating to Aarhus Convention claims (that is claims relating to “environmental matters”). Under CPR 45.43, in Aarhus Convention claims, a claimant’s costs are capped at £5,000 where the claimant is an individual and at £10,000 in other cases, and at £35,000 for the defendant and there is no narrow public interest test. Although at first sight the draft provisions in the Bill apply to all judicial review proceedings and so would conflict with the Aarhus rules, clause 76 allows the Lord Chancellor to introduce Regulations excluding the application of those provisions to those cases which “in the opinion of the Lord Chancellor have as their subject an issue relating entirely or partly to the environment.”
In addition to the financial measures in the Bill, there is a further very significant change. That is the change to judicial discretion on the refusal of relief where it appears that the outcome of the reconsidered decision would inevitably be no different. Currently the effect of rules developed through case law is that Courts may exercise their discretion to refuse relief in cases where it considers it “inevitable” that the result would be the same if reconsidered on the correct basis by the decision making body. Clause 70 inserts amendments to section 31 of the Senior Courts Act 1981 firstly lowering that “inevitable” threshold to “highly likely that the outcome would not have been substantially different, had the conduct complained of not occurred,” secondly removing discretion and requiring Courts to refuse relief where there is a “highly likely” finding and, thirdly, bringing this issue in at the permission stage rather than only the end of the substantive hearing:
The Court would be required to consider the issue of likelihood of different outcome at the permission stage if it is raised by the Defendant and would also be able to consider it of its own motion. Once considered, judicial discretion would be removed in that the Court would be required to refuse to grant leave for judicial review if it appeared to the Court highly likely that the outcome for the applicant would not have been substantially different had the conduct complained of not occurred.
So far, the progression of the Bill through parliament does not appear to have significantly modified or lessened the likely impacts of the proposed changes to judicial review. As currently drafted, the changes to judicial review will be significant and practitioners will need to be well aware of them and keep a close eye on when the Act comes into force.