We are testing a new beta website for gov.scot go to new site

Legal Challenges to Decisions by Public Authorities Under the Public Participation Directive 2003/35/EC: A Consultation

Listen

Proposals under consideration

30. The Scottish Government is consulting on the following proposals for Rules of the Court of Session for Protective Expenses Orders (" PEOs").

  • The rules are to apply to judicial reviews and statutory reviews of decisions by public authorities covered by the PPD. The rules are to apply in the same way, regardless of whether the petitioner in a particular case is a natural or legal person.
  • The rules are to apply in the Court of Session only, and in the case of statutory reviews, only to reviews brought in the Court of Session.
  • A PEO should also be available for mixed cases, that is:
  • where the application concerns matters falling within the scope of the public participation provisions of the PPD, but also raises other matters outwith their scope.
  • where the claim is grounded on whether the public participation provisions of the PPD apply, and turns on whether those provisions apply or not.
  • A PEO will not be made automatically, but must be applied for.
  • A PEO can be applied for at any stage in the proceedings but should be applied for timeously to provide certainty for all parties.
  • The PEO will limit the liability of a petitioner (or applicant) to pay the respondent's costs to £5,000 and also limit the liability of the respondent to pay the petitioner's costs to £30,000.
  • By way of exception, the respondent may apply for the petitioner's cap to be removed - i.e. that there should be no costs capping because the petitioner is not in need of costs protection - where information on the petitioner's resources is publicly available. The application may only be on the basis that the petitioner demonstrably has such funds available for litigation that access to justice is not in issue and no costs protection is required. The respondent must provide justification supported by evidence.
  • The respondent will not be able to require the petitioner to disclose their means.
  • If the application to remove the cap is successful, costs protection will be disapplied altogether, so there will be no cross-cap (an alternative option which provides for the cap to be raised rather than simply removed is also provided for consultation).
  • Costs of the PEO application will not be payable by either party if the PEO is applied for with default terms and is made in those terms (that is to say, there should be no additional costs element for a "default" application and order).
  • 31. Turning to some of the proposals in more detail.

The level of the Protective Expenses Order cap

  • 32. The Scottish Government considers that a cap on the PEO limit would provide the level of certainty required by the PPD.
  • 33. The Scottish Government has considered whether an absolute cap or a presumptive cap would be most suitable. One advantage of an absolute cap is that it would provide more certainty for potential litigants. However, because it would apply without regard to resources, it would afford equal protection to patently wealthy individuals and organisations as it would to those of lesser means. It is suggested therefore that a presumptive limit, capable of being lowered but not raised, would provide the courts with the requisite flexibility to set a limit with appropriate regard to the resources of the applicant. As one of the objectives of any PEO regime is to provide litigants with certainty, the presumptive limit should be altered only where parties show good cause.

A zero cap?

  • 34. The Scottish Government does not support a zero cap ( i.e. a provision that no expenses are payable by an unsuccessful litigant). It is not unreasonable to expect a losing party to contribute in some way towards the costs of a successful party, and the Scottish Government considers that a general requirement on the petitioner to bear some liability will help discourage frivolous or vexatious litigation.
  • 35. Moreover, removing a petitioner's liability to costs goes beyond the requirements of the PPD, which simply requires that remedies should not be "prohibitively expensive".
  • 36. In considering the appropriate amount of the cap, it is helpful to look at what amounts the courts have set PEOs at across the UK. There is limited data available, but examples (of PPD and non- PPD cases) vary across the UK, with awards of between £5,000 12 to £40,000. 13 A cap of £5,000 is proposed in England and Wales and in Northern Ireland, and the Scottish Government agrees this is an appropriate amount.

Cross-cap

  • 37. There is a question as to whether, when a PEO is granted in favour of the pursuer or petitioner, the respondent's liability for costs should be similarly limited should the application be successful. As well as creating a more level playing field ensuring the petitioner does not run up excessive costs, this would encourage the petitioner to minimise the overall costs of a case. The Scottish Government supports the introduction of such a mechanism, known as a "cross-cap", but does not wish it to act as a disincentive to potential litigants. It is therefore of the opinion that this also should be subject to a presumptive limit, and be capable of being displaced.
  • 38. The cross cap serves a different purpose from that of the cap on the PEO, which is aimed at ensuring access to justice and providing legal certainty. The cross-cap is designed to reflect a reasonable limit for bringing a judicial review or first instance statutory review, and that public resources are not unlimited. A cross-cap would also discourage a pursuer from running up excessive legal costs on their own side.
  • 39. The Scottish Government is of the view that £30,000 would be a proportionate limit to set.
  • 40. The Scottish Government invites views on the appropriate level of cross-cap. The benefit of prescribing a monetary figure (albeit subject to judicial discretion) would be to provide certainty and clarity for the respondent.

Challenges to the cross-cap

  • 41. A petitioner might reasonably wish to incur costs above the level of the cross-cap if it is believed the case will require more resources than the average judicial review. However, it may be undesirable to allow a cross-cap to be challenged on the grounds that this would add another layer into the procedure by increasing the likelihood of challenges and it would hinder the objective of keeping overall costs in these cases to a minimum.
  • 42. Views are invited on whether the advantages of allowing cross-caps to be challenged would outweigh the disadvantages. Views are also sought as to whether where a cross-cap is successfully challenged, the level of PEO should be revisited.

How to treat PEOs in appeals.

  • 43. Views are invited as to whether the proposed rules should apply to appeals against first instance decisions covered by these proposals (technically, "reclaiming motions" when appealing to the Inner House) and if so, on what basis. There are two ways in which the proposed rules might apply. Firstly, it would be possible to provide that the original PEO would apply to all proceedings including any appeals. This would in effect apply a zero cap in appeals in the vast majority of cases, as the limit of recoverable costs will have been reached prior to any appeal.
  • 44. A second option is to require that the petitioner reapplies for a PEO on appeal. An additional consideration will be if it is not the petitioner who appeals, in which case they will have had no choice about incurring extra costs.

Challenges

  • 45. The Scottish Government does not wish to introduce disincentives relating to matters of personal privacy to members of the public seeking to have environmental decisions reviewed. Views are therefore sought as to whether the court should only be able to make enquiries into the means of individual applicants where that information is already in the public domain, or where an organisation is providing funding towards the litigation.
  • 46. It might be suitable to impose an additional requirement that a challenge is only allowed where the funds available to the pursuer are such that access to justice is not an issue, and therefore that no costs protection is required. This would enable challenges to PEOs granted to patently wealthy parties for whom the costs of an action would not be considered "prohibitively" expensive.
  • 47. A further question on which views are sought is whether the tests outlined above should not apply to PEOs granted to organisations as well as individuals. The finances of many organisations, including pressure groups and NGOs, are often already a matter of public record. It may therefore be argued that it is possible and reasonable for the defending party to demonstrate that costs protection is not required.
  • 48. The level of the cap and procedures for challenging or disapplying it are interlinked. The lower the cap, the greater the likelihood that other parties will seek to challenge it; the higher the cap, the greater the likelihood of applications for its reduction. It is important that the limit of the cap should be set at a level that allows for an efficient procedure. Introducing tests to be satisfied before a challenge may be made against a PEO, such as those discussed above, should assist in streamlining the process, by reducing delays caused by unmeritorious challenges.
  • 49. In light of the overall aim to ensure an efficient and fair procedure, it is considered that in order to discourage applications without merit, it might be appropriate to introduce costs sanction for unsuccessful challenges to the cap.

Lord Gill's recommendations on protective expenses orders

  • 50. By way of footnote, Lord Gill's Scottish Civil Courts Review recommended that the Court of Session have power to make a PEO along the lines of a model proposed by the Australian Law Reform Commission. 14 The Scottish Government considers however that the model suggested in the review would not result in the level of certainty which the European Commission view as necessary; there is, for example, no presumption in favour of a cap being granted. The model suggested in this paper therefore represents a departure from Lord Gill's recommendations in this regard.