Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Avebury Excerpts

Wednesday 1st February 2012 Lords Chamber

[Lord Lester of Herne Hill]

My Lords, I must choose my words carefully because I do not wish what I say to be taken to be outright opposition to my noble friend’s amendments, although I have a certain degree of agnosticism, if not scepticism. I suggest that those who are interested in this area might read the New Yorker article of a couple of weeks ago, which described the abuse of power by the claimant lawyers in the Exxon South American environmental litigation case. That indicates the need for very careful safeguards, even in an environmental setting.

The only reason I speak at all is because it occurs to me that there is a less radical solution to some of the problems that has been fashioned by the courts themselves without any legislative intervention: namely, the protective costs order. I see that the noble Lord, Lord Beecham, shakes his head. I shall explain what I am talking about. The problem with English cost rules is, of course, the winner-takes-all rule, which can, as my noble friend has indicated, have a seriously chilling effect on the ability to bring public interest litigation. It is the fear of claimants and their advisers of having to pay the legal costs of the defendant that has a chilling effect.

I was involved in the Corner House case for a small NGO that was seeking to challenge the lack of proper consultation by the Secretary of State in relation to anti-corruption provisions in the export guarantee area. This was not an environmental matter but it did concern public law. The problem was that the little NGO had absolutely no funds to pay for me but, more importantly, the department. The department would not give an assurance in advance that if it succeeded, it would not ask for the whole of its costs against the NGO. Therefore, the puzzle was how the NGO could bring the public interest proceedings not simply by dealing with the claimant’s position but dealing with the other side.

Sir Henry Brooke, to whom I pay tribute and who throughout has led thinking on this issue within the judiciary, advocated the use of a protective costs order, which enabled us to go before the court and say, “Even if we lose, can we please have a protective order that protects us against the risk of having to pay the other side’s legal costs in advance, so that we know that the worst thing that could happen to the Corner House NGO would be if it had to pay its own costs?”. I am glad to say that that was what was eventually decided and the result was that the Corner House was able to litigate.

I am embarrassed to say that I signed a 100 per cent success fee agreement without realising the consequence, which was that I actually profited from what I had thought to be a public-spirited case. I did not return the money, since it was being paid by the Government. I am against 100 per cent success fees and I would never do it again—ever.

However, the point I am making is not about success fees, but that if one develops through the courts, on a case-by-case and flexible basis, a way of softening the winner-takes-all rule in appropriate cases—not just environmental but all cases—that would enable the weak and impecunious to avoid the effect of that rule. The Constitutional Court of South Africa has decided that the winner-takes-all rule should never apply in important constitutional cases, and that in a proper public-interest case each side should at least bear its own costs and, in some circumstances, the Government should be required to pay the claimant’s costs, or give an undertaking in advance to give that protection.

This is a slightly long-winded way of saying that there are other means that perhaps are to be encouraged by the legislature, or perhaps not. There are other means that the courts themselves have been developing that can deal with some of the points made by my noble friend without something quite as radical as the proposals suggested in his amendments.

[Lord Avebury]

My Lords, does my noble friend agree that the protective costs order that he was successful in obtaining in the case he mentioned was a one-off, that it was not a general rule of law but a matter of luck that his clients were indemnified against the likelihood that they would have to pay the other side’s costs, and that in the amendment that would be a general rule of law that would apply to all such cases?

[Lord Lester of Herne Hill]

Actually, I cannot agree, because the Court of Appeal’s decision was a kind of precedent and it has been followed. There have been arguments about what limits there should be on claimants—whether they should be like an NGO or otherwise—but it would be perfectly possible for a rule to be made by the Lord Chancellor expressly empowering the courts to apply protective costs orders on a more general basis. This was not just a one-off decision; it applied in a line of cases and has been developed since.