Civil Procedure (Amendment) Rules 2017

Lord Marks of Henley-on-Thames Excerpts

Wednesday 13th September 2017 Lords Chamber

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[Lord Marks of Henley-on-Thames]

That this House regrets that the Civil Procedure (Amendment) Rules 2017 have been laid with insufficient regard to the overwhelmingly negative response to the proposed Rules during the consultation and to the lack of evidence that significant numbers of unmeritorious environmental claims are currently brought; that they may escalate claimants’ legal costs and act against the intention of the Aarhus Convention that the cost of environmental litigation should not be prohibitive; and that they are likely to have the effect of deterring claimants from bringing meritorious environmental cases (SI 2017/95 (L. 1)).

Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee, Session 2016–17

[Lord Marks of Henley-on-Thames (LD)]

My Lords, this regret Motion raises three important matters of principle: first, the accountability of government and the rule of law; secondly, access to justice for the public and cost protection in environmental cases; and, thirdly, compliance by the United Kingdom with its international obligations.

Environmental cases are frequently brought by individual citizens and concerned organisations to challenge the executive action of government, national or local, which threatens the environment in which we all live and on which we all depend. Where government acts unlawfully, judicial review exists to enable such claimants to hold government to account. These cases are often complex and expensive. As a party to the Aarhus convention, entered into in 1998 under the auspices of the United Nations Economic Commission for Europe and ratified by the United Kingdom in 2005, enshrined in EU law, this country committed to guarantee in environmental cases to provide,

“adequate and effective remedies, including injunctive relief as appropriate, and be fair, equitable, timely and not prohibitively expensive”.

In April 2013, finally and after much procrastination and an adverse decision of the Court of Justice of the European Union in a case called Edwards, the Government introduced rules to implement the convention requirement that costs should not be prohibitively expensive. They did so by establishing an environmental costs protection regime, which, among other things, limited the costs payable by claimants to defendants in environmental judicial review cases. Your Lordships may remember that, in the Criminal Justice and Courts Act 2015, although this House successfully secured amendments limiting the damage, the Government legislated to impose a number of harsh costs provisions on judicial review, but in that Act costs protection arrangements for Aarhus convention cases escaped attack. However, this February Liz Truss, then Lord Chancellor, laid before Parliament the Civil Procedure (Amendment) Rules 2017, to which this regret Motion is directed. I first tabled this Motion in March, but the sudden general election was called before it could be heard.

My first objection to the new rules is to the requirement that a claimant seeking costs protection must disclose,

“a schedule of the claimaint’s financial resources”.

That schedule must also disclose “any financial support” from others helping to fund the case. This requirement, I suggest, is invidious, offends against privacy and is likely—indeed, calculated—to deter potential claimants and their supporters. Supporters will be put off because they risk being ordered to pay costs. The European Commission, in a letter written in March, wrote that,

“a requirement for litigants to provide information of their own personal means is also likely to result in a chilling effect with many individuals not wanting to make their personal finances publicly known”.

That must be right.

The costs limits are £5,000 for individual claimants or £10,000 for businesses or organisations. My second objection to the changes is that the new rules provide that multiple claimants will each be liable for a costs order in those sums. Before these changes, the general practice was that the overall cap would apply even if there were several claimants, but that was not invariable. The convention Compliance Committee considered this change and has said that it could see no basis for this amendment, which, it said,

“removes an important possibility for members of the public to defray the costs of proceedings by sharing the cost burden with other concerned members of the public”.

It said that it,

“substantially increases the likelihood of extensive satellite litigation to determine the costs cap per claimant, further increasing uncertainty”.

However, the third and most important and powerful objection is that the new rules have driven a coach and horses through the whole principle of costs protection in environmental cases. That is because they provide that, at any stage of the case, the court may vary or remove altogether the limits on the maximum costs liability of any party in an Aarhus convention claim. It is true that the rule pays lip-service to compliance with the convention by limiting the power to cases where removing protection would not make the costs of the proceedings prohibitively expensive. The rules define when proceedings are to be considered prohibitively expensive, which they may be if they,

“exceed the financial resources of the claimant; or … are objectively unreasonable”—

applying tests that roughly reflect those set out in the Edwards case, but which are extremely difficult to fathom. Any financial support of the claim by others must also be taken into account. I suggest that the overall effect is that any claimant may feel at risk unless his or her entire capital would be consumed by an adverse costs order. The reality is that costs protection which can be removed half way through a case is no costs protection at all. These rules undermine government accountability, diminish the rule of law and reduce access to justice in environmental cases for all but the very wealthy.

When the changes were first proposed, they were put out to consultation. The response was overwhelmingly negative. The Secondary Legislation Scrutiny Committee of your Lordships’ House produced a report that can only be described as scathing on the proposed changes. On the consultation, it said:

“The analysis in the EM”—


the Explanatory Memorandum—

“simply states that the consultation exercise received 289 responses. It does not explain, as it should, that for most of the questions the number supporting the Government’s proposal was less than ten: the vast majority of the responses received were against the proposed changes”.

The committee further noted the Government’s policy aim of,

“discouraging unmeritorious claims which cause unreasonable costs and delays to development projects”,

but the committee found no evidence to support the Government’s position. It also concluded that the Ministry of Justice had not addressed concerns and that,

“as a result of the increased uncertainty introduced by these changes, people with a genuine complaint will be discouraged from pursuing it in the courts”.

These rules inevitably deter legitimate challenges to government decisions. To take one example of their chilling effect, the Liverpool Green Party recently wished to challenge permission for a car park in an air quality management area granted by the council without its first undertaking an air quality assessment. The party was advised that it had a strong claim for judicial review, and it wrote a letter of claim. In its response, however, the council did not address the substance of the complaint but wrote that,

“it is noted that the court now has discretion … to vary the limits on maximum costs liability for Aarhus Claims and the Council will therefore require confirmation of the financial resources of your client in the event that it seeks a protective costs order”.

In the face of that letter, the party was unable to find an individual prepared to act as claimant, so the case was never brought.

I said at the outset that this Motion was about the rule of law. If the House passes this regret Motion, it will give the Lord Chancellor, who is widely held in high regard, an opportunity to show that he understands—better than his predecessor—the importance of government accountability, access to justice, the rule of law and of complying with our international obligations, in this case under the Aarhus convention. If he understands those things, he will withdraw these rules. I beg to move.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I do not usually find myself on the opposite side of the debate from the noble Lord, Lord Marks of Henley-on-Thames, but here I am. I make just two comparatively brief points—first, that the original 2013 rules to which he referred, which the 2017 rules that we are considering today have replaced, were drawn up before the CJEU gave the judgment in the Edwards case to which the noble Lord referred. That case was originally referred to the CJEU in 2011 by the Supreme Court, in which I was one of the five sitting, under the presidency of my noble and learned friend Lord Hope of Craighead.

The original 2013 regime provided simply for fixed-cost caps for claimants and defendants. The noble Lord mentioned that the caps are £5,000 and £10,000 respectively, depending on whether it is one or more claimant. It costs £35,000 for defendants in certain environmental law challenges—judicial reviews—with no account being taken under those rules of the particular claimant’s financial position, whether they are a millionaire or a pauper, or of the strength of the challenge that they would bring.

The new rules were introduced after what seems to me an impeccable consultation process. It is true that, perhaps not unusually in this sort of situation, the great majority of those responding were unenthusiastic, to put it no higher, about certain aspects of the proposed changes, certain of which were changed following consultation. But the new rules take full account of the several factors set out by the CJEU in the Edwards case as being relevant to the proper approach to the Aarhus convention in this respect. It is true that the new approach is more complex and allows, as the old regime did not, for a variation of those default costs limits—variations, I should emphasise, in either direction, possibly in favour of a claimant, as access to justice might be thought to require, during and not merely at the outset of the legal challenge.

The measure, therefore, could be said to illustrate the age-old problem in the law of balancing the respective merits of certainty and flexibility—there of course being in all cases pros and cons of each. I, for my part, do not accept that meritorious claimants are likely to be deterred and, certainly, I do not regard these new rules as manifestly contrary to the rule of law, or being unlawful and the rest.

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The second point is this: the question of whether these new rules are unlawful is itself currently the subject of legal challenge. In proceedings heard by the High Court in July, three claimants—the Royal Society for the Protection of Birds, Friends of the Earth and ClientEarth—brought a full and detailed challenge against the Lord Chancellor to these rules. I have in fact read the 25-page skeleton argument that was submitted for the claimants in those proceedings and the 20-page response on behalf of the Lord Chancellor. I would suggest that the arguments are a good deal more nuanced than the noble Lord’s opening might suggest. Judgment was reserved in July and it remains outstanding.

[Lord Marks of Henley-on-Thames]

My Lords, I should perhaps make it clear that I deliberately refrained from referring to that case because it is sub judice, a judgment not having been given. So I have not referred to it and have not dealt with it. I take no issue with the noble and learned Lord so doing, because this is a case about delegated legislation but, nevertheless, I did not do so.

[Lord Brown of Eaton-under-Heywood]

In so far as the sub judice rule would apply to a debate of this character, I respectfully do not for a moment accept that I am breaching it. I am suggesting that it is highly relevant to the present Motion to Regret, a Motion which, as the noble Lord said, was initially tabled in March and, therefore, before those proceedings. In so far as, for example, it is now said that we are in flagrant breach of the rule of law and all the rest of it, those issues fall to be decided properly in the context of full argument in those proceedings and not to be well-nigh pre-empted by a Motion to Regret today. For my part, I would not support a Motion to Regret without the benefit of the High Court’s judgment on the legal issues arising.

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[Lord Keen of Elie]

I do not accept that. Quite apart from anything else, I again make the point that some of these matters have already been submitted in argument to the High Court. It has heard those arguments and will deliver judgment upon these points. I am quite clear in my own mind that the cap has a default position; it may be varied in light of the schedule of means, but once it is fixed there have to be identifiable and fixed circumstances, such that the claimant misled the court in the first place, before it will be reviewed on an application by the defendant. It is very clear, and the grounds upon which that can be done are patently very narrow.

[Lord Marks of Henley-on-Thames]

Perhaps the Minister will explain where those grounds are rigidly defined because they are nowhere in the rules, as I read them. The statement of financial resources has to be provided with the original application. It is not a question of there being a default cap which may then be varied on the basis of the statement of means. Rule 42 is absolutely clear that at the outset the statement of financial resources has to be provided.

[Lord Keen of Elie]

On the second point, I do not demur. The point is that there is a default position but, in the light of the schedule of means that is produced at the outset, that may be varied down or up. I have no difficulty with that whatever. As to the first point that the noble Lord alluded to, I commend to him a little patience because the High Court is about to opine on these matters, having heard argument. He will be familiar with the pleading that the NGOs submitted in their judicial review and with the notes of argument that were submitted on behalf of the claimants and on behalf of the defendants in that matter. They focus on the very issue of the limited circumstances in which any variation can take place at a later date. I have referred to two possibilities. They are the only two possibilities of which I am aware, and I put that into Hansard. If there were a third or fourth, I would have mentioned it.

The Government understand that, following the most recent changes in February, environmental claims continue to be brought. That said, the Government agree that it is too early to make a fully effective assessment of the impact of the changes to the environmental costs protection regime to date. We will keep the impact of the new environmental costs protection regime under review and will review it formally when we have sufficient data, so I seek to reassure the noble Baroness on that point.

The Government need to strike a balance between enabling appropriate claims to proceed and making sure that unmeritorious claims are not encouraged. Those who can pay towards the costs of unsuccessful claims should do so, subject always to the requirement that Aarhus convention claims should not be prohibitively expensive. Overall, the Government believe that the reforms that have been introduced are fair and reasonable and certainly comply with our international obligations. That is the subject of a current challenge on which the High Court is about to opine. I respectfully suggest that it would be premature for this House to anticipate the opinion of the High Court on these points and I hope that the noble Lord will withdraw his Motion.

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[Lord Marks of Henley-on-Thames]

My Lords, I am very grateful to everyone who has spoken, particularly of course to those many noble Lords who have spoken in favour of my regret Motion. I will be very brief in closing, but will address the point made just now by the Minister and by the noble and learned Lord, Lord Brown of Eaton-under-Heywood. They both mentioned —indeed the Minister relied upon—the High Court challenge to the legality of these regulations. This Motion is a parliamentary Motion and entirely independent of the High Court proceedings. If the High Court challenge succeeds, that will be the end of the matter and the rules will be quashed. The question in that case is whether the then Lord Chancellor could lawfully make the new rules; the question for this House is whether she should have made the rules or whether they offend against the principles which I mentioned at the outset.

The central point in this regret Motion is that the new rules reduce costs protection, for precisely the reason set out by the noble Lord, Lord Pannick. Costs protection comes from having the confidence that when you go into a case and have a costs protection order, you will be limited in your liability to £5,000 for individuals or £10,000 for organisations. It is the claimant’s costs protection that is important in these cases. I invite noble Lords to remember that very often this is public interest litigation, where concerned individuals and concerned organisations—not all large, some of them small, often charities—go into litigation not for a personal interest but because they want to secure the public interest. Why would they go into that litigation with the risk that they are going to have their exposure radically increased during the case? I do not accept the Minister’s interpretation of the arguments that were put in the current challenge on the circumstances in which a limitation can be removed—that is not in the rules and we have not had the judgment.

This is the kind of litigation that we are concerned with. Costs protection is a very important part of it and was the Government’s response in 2013 to the Aarhus convention. This is what is necessary to comply with it, in terms of the politics of this House making sure that costs are not prohibitively expensive. I have heard nothing that persuades me to withdraw my regret Motion and I wish to test the opinion of the House.