Wed, 01 Sep 2021
This analysis was first published on Lexis®PSL on 25 August 2021 and can be found here (subscription required)
Planning analysis: The Supreme Court considered a costs challenge concerning a planning statutory review. The court held that the Court of Appeal had not erred in concluding there was no general rule in planning cases limiting the number of parties who can recover their reasonable and proportionate costs of preparing acknowledgments of service and summary grounds. Written by Howard Leithead, barrister at No5.
CPRE Kent v Secretary of State for Communities and Local Government [2021] UKSC 36
What are the practical implications of this case?
This judgment affects not only planning statutory review, but also judicial review cases. It establishes that defendants and interested parties have a prima facie entitlement to receive their costs if they file an acknowledgment of service and are successful at the permission stage.
For defendants and interested parties, this will obviously provide some encouragement. However, they should remember that this does not necessarily mean that they will receive all their costs, or indeed any of their costs. To be recoverable, costs must be reasonable and proportionate.
The Supreme Court quoted (at para [10]) an example of a situation where costs might not be recoverable that was given by Lord Justice Coulson in the Court of Appeal:
‘if there is an obvious lead defendant and the court was not assisted by the [acknowledgment of service] or summary grounds of an additional defendant(s) and/or interested party, then the costs of that additional defendant(s) and/or interested party may not be proportionate and so will not be recoverable.’
Such assessments will be made on a case-by-case basis.
It is possible that this judgment will discourage some potential claimants from bringing claims. When filing a claim, potential claimants will not know whether a costs protection cap (‘Aarhus cap’) under CPR 45 will be imposed, or what the level of the cap might be. They will also not be able to assess with any certainty whether they will need to pay more than one set of costs if they are unsuccessful.
However, in many cases, it will be uncontroversial that an Aarhus cap should be applied. Potential claimants can be advised as to whether it is likely that a court would impose a cap or whether it would likely vary the limits set out in CPR 45.43. (For claimants, these are £5,000 where they are claiming only as an individual and not as, or on behalf of, a business or other legal person and £10,000 in all other cases).
It further seems unlikely that the courts will tolerate unreasonable and disproportionate costs bills from defendants and/or interested parties. The situation will be monitored and, as the Supreme Court observed, rules and practice directions can be amended and the Court of Appeal can provide further guidance.
What was the background?
Maidstone Borough Council (the Council) produced a new local plan (the local plan), which was examined by an inspector appointed by the Secretary of State. Among the policies that the inspector upheld was an employment policy, Policy EMP1(4). After the Council adopted the local plan, CPRE Kent challenged Policy EMP1(4) by filing for a claim for statutory review in the High Court under section 113 of the Town and Country Planning Act 1990.
On the advice of court staff, the claim form was amended to name the Secretary of State as the first defendant, the Council as the second defendant, and Roxhill Developments Ltd (‘Roxhill’) as an interested party. Each of the Secretary of State, the Council, and Roxhill filed acknowledgements of service and summary grounds for contesting the claim in which they invited the court to refuse permission for it.
Ms Justice Lang refused permission and made costs orders in favour of both defendants and Roxhill. She further accepted that the claim within the scope of Article 9 of the Aarhus Convention and CPRE Kent obtained protection against an adverse award of costs, by means of an Aarhus cap of £10,000.
CPRE Kent did not renew its application for statutory review, but challenged Lang J’s costs decision. The costs decision was affirmed by Her Honour Judge Evans-Gordon and CPRE Kent appealed to the Court of Appeal, where permission to appeal was granted, but the appeal was dismissed. CPRE Kent then appealed to the Supreme Court.
In the Supreme Court, CPRE Kent relied on the guidance in Bolton MDC v SSE (Costs) 1995 1 WLR (‘Bolton’) for costs at the permission stage and argued that it should not have been required to pay more than one set of costs in a planning statutory review where there were multiple defendants. It further advanced several policy arguments against the practice of awarding multiple sets of costs at the permission stage. These included that a claimant would be significantly exposed if the court decided that an Aarhus cap should not be applied and that this uncertainty would create a chilling effect on the pursuit of claims.
What did the court decide?
Lord Hodge gave a judgment with which the other justices agreed. He observed that the question for the court was whether the Court of Appeal erred in law by upholding as a practice that, in the context of a refusal of permission to bring a planning statutory review, where two defendants and an interested party each incurred expense in preparing separate acknowledgments of service and summary grounds, each had a prima facie entitlement to receive their costs. He noted that the question raised by the appeal extended beyond a planning statutory challenge subject to the procedure set out in CPR PD 8C as there were similar rules for acknowledgment of service by defendants and interested parties in the context of judicial review in CPR 54 and CPR PD 54A.
Lord Hodge said that a court’s authority in relation to the award of costs came from various sources. The relevant source, he said, was the responsibility of the appellate courts, principally the Court of Appeal, to develop the principles upon which courts may exercise their discretionary power within the framework of section 51 of the Senior Courts Act 1951, the rules of court made by the Civil Procedure Rule Committee, and the practice directions. He said that this responsibility arose because the rules of court and the practice directions were not a comprehensive code.
Referring to the guidance of Supreme Court in R (Gourlay) v Parole Board [2020] UKSC 50, Lord Hodge said that the principles laid down by the appellate courts in fulfilling this responsibility were generally matters of practice and not matters of law. He further said that, as the Court of Appeal was primarily responsible for monitoring and controlling the developing practice in relation to orders for costs, it was well established that the House of Lords was, and the Supreme Court is, very slow to intervene (Callery v Gray (Nos 1 and 2) [2002] UKHL 28).
In turning to apply the law to the facts of the case, Lord Hodge noted that Bolton was concerned with the award of costs after a substantive hearing and predated the introduction of the CPR in 1999, which introduced the acknowledgment of service procedure. He referred to subsequent cases and said that these provided guidance which supported the view that the procedural innovations in CPR 54 justified an exception from the practice set out in Bolton in relation to the cost of preparing and filing an acknowledgment of service and summary grounds. This reasoning he said, was also applicable to claims pursued under CPR PD 8C.
Lord Hodge further noted that Coulson LJ had concluded in his judgment in the Court of Appeal that there was no general rule in planning cases limiting the number of parties who can recover their reasonable and proportionate costs of preparing acknowledgments of service and summary grounds if permission is not granted for two reasons: first, since the innovation of the acknowledgment of service procedure, it is mandatory for a person who wishes to participate in proceedings to file an acknowledgment of service and secondly, the authorities establish a person’s entitlement to their reasonable and proportionate costs in those circumstances. Lord Hodge said that the guidance in Bolton had to be read in the light of this subsequent development of the rules, but that it remained relevant in planning cases as a defendant or interested party can only recover those costs that are reasonable and proportionate.
In conclusion, Lord Hodge said that he was satisfied that the Court of Appeal had not erred in law and that the appeal should be dismissed. He said that the guidance as to practice in Bolton was no more than that: guidance as to practice.
He further said that the Court of Appeal had not erred in its construction of CPR 54.8 and 54.9 (which concern acknowledgment of service and the failure to file it respectively) and the equivalent provisions in CPR PD 8C. In explaining this he made three points. First, he said that the Court of Appeal had been correct in R (Mount Cook Land Ltd) v Westminster CC [2003] EWCA Civ 1346 (‘Mount Cook’) and in this case that the filing and service of an acknowledgment of service was mandatory if a person served with the claim wished to take part in the proceedings. He said that if a person failed to do so they risked not being able to participate in a permission hearing and therefore potentially defeating a claim at an early stage. Secondly, he said that there was nothing in the CPR to exclude an award of costs for the preparation of an acknowledgment of service and thirdly, he said that while, what is now CPR PD 54A, para 7.5 (which is discussed in Mount Cook), establishes a general practice in relation to costs at a permission hearing, it is silent as to the cost of preparing an acknowledgment of service.
Finally, as to the policy arguments advanced by CPRE Kent, he referred to instances where the courts have called on the Civil Procedure Rule Committee to address the procedure for costs at the permission stage and the principles to be applied. He said that the Committee could make rules, or the Master of the Rolls could make appropriate practice directions, or the Court of Appeal could review its guidance on practice. However, he said that absent an error of law of general public importance it would not ordinarily be appropriate for the Supreme Court to intervene in a costs decision and that there was no basis for it to do so in this case.
Case details:
- Court: Supreme Court
- Judge: Lord Reed, Lord Hodge, Lord Lloyd-Jones, Lord Leggatt, and Lord Burrows
- Date of judgment: 30 July 2021
