Protective Expenses Orders and public interest litigation

Pages36-65
AuthorTom Mullen
DOI10.3366/elr.2015.0250
Date01 January 2015
Published date01 January 2015
INTRODUCTION

This article concerns the practice of excluding or limiting the liability in expenses of public interest litigants in judicial reviews and statutory appeals, a comparatively recent development in the United Kingdom legal systems. Such orders are called protective expenses orders (PEOs) in Scotland and protective costs orders (PCOs) in England and Northern Ireland, and in all three jurisdictions have been developed by the judges in the exercise of the wide discretion they have traditionally enjoyed in relation to awards of expenses. During 2013, rules of court on PEOs/PCOs were adopted in both Scotland and England, and regulations enacted in Northern Ireland, applying specifically to public interest environmental law litigation, but there appear to be no plans for codification of the law on PEO/PCOs in judicial reviews and statutory appeals generally. This, therefore, seems to be a good moment to reflect on the development of these orders in the light of the purposes of administrative law and of public interest litigation. Questions of expenses might seem at first sight to be far removed from the central questions of public law. In fact they have become very important to the promotion of public law values, particularly the central value of ensuring that public bodies act lawfully. This article, therefore, provides an analysis of PEOs in Scotland, taking account of the English experience.

THE RATIONALE FOR PROTECTIVE EXPENSES ORDERS

First, it is necessary to consider the rationale for making PEOs. They are essentially a means of facilitating public interest litigation, i.e. litigation in which the primary motive is to promote the general public interest rather than to protect the private interests of specific persons. To give an example, a legal challenge to a grant of planning permission for a new building by a neighbour who feared that the amenity of his or her property would be diminished would be private interest litigation; a legal challenge to the same grant of planning permission by a group concerned that the demolition of the existing building would deprive the area of a building of historical and architectural interest would be public interest litigation. Financing of public interest litigation is always likely to be difficult because the legal aid schemes in the United Kingdom's three jurisdictions do not support public interest cases and because it tends to be difficult to finance the litigation from private funds precisely because no-one stands to gain personally. If those who contribute their own funds to support public interest litigation face not only the prospect of losing the money invested in the litigation in the event that the case is dismissed, but also of paying substantial awards of expenses to the other side, it will be even less likely that people will seek to litigate to advance the public interest. Speaking in 1989, Toohey J, a judge of the High Court of Australia, expressed the problem in this way:

Relaxing the traditional requirements of standing may be of little significance unless other procedural reforms are made. There is little point in opening doors to the courts if litigants cannot afford to come in … The fear, if unsuccessful, of having to pay the costs of the other side – with devastating consequences to the individual or environmental group bringing the action – must inhibit the taking of the case to court.1

Address to conference of the Australian National Environmental Law Association (1989), cited in R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, [2005] 1 WLR 2600, at para 31.

The obstacles to public interest litigation

Until the last few decades in England and Wales, and much more recently in Scotland, the main obstacle to public interest litigation was the approach that the courts took to standing, i.e. the question of who is to be permitted to challenge unlawful administrative action in court. They applied a private rights model of judicial review which assumed that the purpose of the courts and legal process was to allow persons to assert and protect their legal rights. This led to a narrow approach to standing, under which only those with a specific personal interest in the outcome of litigation could seek judicial review.2

For a general discussion of standing in judicial review in Scotland, see T Mullen, “Standing to Seek judicial Review” in A McHarg & T Mullen (eds), Public Law in Scotland (2006). For England and Wales, see P Craig, Administrative Law, 7th edn (2012) ch 25.

In practice, this made it very difficult for persons to sue to enforce the public interest. As explained below, that obstacle has largely been removed by expansion of public interest standing, and so the focus has shifted to other obstacles, notably the question of expenses
The purposes of judicial review

The changes that have taken place both to the law of standing and the law of expenses should be considered in the context of the purposes of administrative law and, in particular, of judicial review. For most of the twentieth century, the orthodox view of the purpose of judicial review was that of keeping public bodies within the limits of the powers granted to them by Parliament,3

Amongst other references, see Moss' Empires Ltd v Assessor for Glasgow 1917 SC (HL) 1; Lord Clyde and D Edwards, Judicial Review (2000), 54–55; and H W R Wade & C F Forsyth, Administrative Law, 10th edn (2010) 30–35.

and the legal system relied largely on private interest litigation to achieve that goal. In recent decades, broader conceptions have gained more influence, including the desirability of establishing standards of good administration and requiring administrators to follow them,4

See the comments of Lord Donaldson, MR in R v Lancashire CC, ex parte Huddleston [1986] 2 All ER 941.

the protection of human rights,5

See, e.g., Sir John Laws, “Law and Democracy” [1995] Public Law 72.

and, perhaps most ambitiously, seeing administrative law as a surrogate political process so that litigation is used to advance political goals.6

See, e.g., R Stewart, “The Reformation of American Administrative Law” (1975) 88 Harvard LR 1669 and C Harlow & R Rawlings, Pressure Though Law (1992).

However, although many academics and practitioners have advanced these visions of the goals of administrative law, and there is no doubt that the changing intellectual climate of public law has influenced judicial decisions, these are not the only rationales capable of explaining and supporting the expansion in the role of the courts which has undoubtedly taken place. That expansion can be explained at least in part in terms of the traditional rationale of keeping public bodies within the limits of the powers granted to them by Parliament

This is because legislation, notably the European Communities Act 1972, the Human Rights Act 1998, and the devolution statutes, has given the courts a stronger mandate than they had before to protect fundamental rights and constitutional values. It can be said that, by enacting this legislation, Parliament has imposed general limitations on all of the specific powers it grants to public bodies which go beyond those expressed in the traditional grounds of judicial review, and, more specifically, that the courts have been required to declare administrative action unlawful whenever it fails to meet the requirements of European Union law or the European Convention on Human Rights. The enactment of these constitutional reforms does not settle debates over the scope and nature of judicial review but it does shift the ground; a return to minimalist judicial review would be difficult to reconcile with the current constitutional framework.

The doctrinal consequences of changing conceptions of judicial review and constitutional reform legislation have included not only expansion of the grounds of judicial review and increasing the intensity of scrutiny of governmental decision-making, but also a broadening of standing requirements to accommodate public interest standing which has, as noted above, focused attention on the remaining barriers to judicial review.

Both the broader views of the purposes of judicial review and the traditional view can provide the basis of an argument that the courts ought to have the power to make PEOs because the absence of such a power may deter people from taking necessary legal action for fear of being bankrupted by legal costs. The view that law may function as a surrogate political process suggests that interest groups should be allowed to seek judicial review to challenge the actions and decisions of public bodies. Thus, political campaigns against decisions that such groups think are not in the public interest can be supplemented by legal action (assuming, of course, there is a plausible argument to be made that a public body has acted unlawfully). In a similar way, if protection of human rights is deemed to be a fundamental legal value, it can be argued that litigation to protect human rights should be encouraged.

However, it is also possible to make a case for PEOs from within the traditional conception of judicial review as a means of keeping public bodies within the limits of their powers. This rationale for judicial review can be seen as an expression of the constitutional principle of the rule of law. The expression “rule of law” has been given many meanings, but I use it in its narrow sense of meaning that it is essential that government, particularly executive government, be able to show legal authority for its actions.7

This corresponds to the first of Dicey's three meanings of the rule of law. See A V Dicey, Introduction to the Law of the Constitution (1885) 187–196. See also Clyde & Edwards, Judicial Review (n 3) 67–71 and Wade & Forsyth, Administrative Law (n 3) 17–25.

One advantage of framing the case for PEOs in terms of the traditional rationale for judicial review is that the latter
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