Curb on "prohibitively expensive" litigation costs must await Jackson review, appeal judge says

Date:

10/03/2009

Source:

Solicitors Journal

Matter:

Morgan and Baker - Hinton Organics

The United Kingdom may be "vulnerable" to European Commission action to control the cost of environmental litigation, the Court of Appeal has warned.

The Aarhus Convention, signed by the UK, states that costs in environmental cases should not be "prohibitively expensive".

This principle has formed part of European directives applying to public law cases. In Morgan and Baker v Hinton Organics (Wessex) [2009] EWCA Civ 107, Lord Justice Carnwath said the Aarhus Convention could also apply to private nuisance actions.

He said that although the Convention had the status of a international treaty and was not directly incorporated into UK law, its principles should be taken into account by the courts.

"For the present we are content to proceed on the basis that the Convention is capable of applying to private nuisance proceedings such as in this case.

"The UK may be vulnerable to action by the Commission to enforce the community's own obligations as a party to the treaty."

He said Lord Justice Jackson's review of civil litigation costs, being carried out this year, provided "an opportunity for considering the Aarhus principles in the context of the system for costs as a whole."

Richard Buxton, who runs his own environmental law practice in Cambridge, acted for Morgan and Baker.

"This is the first time a UK court has grappled with the principles of the Aarhus Convention in an environmental context," he said.

"The Court of Appeal has recognised that the Convention must be given proper attention and is capable of applying to private nuisance cases."

Buxton said he had made submissions to Lord Justice Jackson's review of costs.

"Environmental cases must be protected. At the moment costs are used to stop people litigating when they have every right to do so."

In Morgan and Baker two residents of Pudlow, a hamlet near Bristol, unhappy at bad smells from a commercial composting site, brought a private nuisance action against the owners.

They won an interim injunction, but following representations from the local council and the Environment Agency, it was discharged. Costs of almost £25,000 were awarded against the residents.

"Although the claimants had legal expenses insurance limited to £50,000, the costs award put at risk the prospect of their being able to pursue their claims to a trial," Carnwarth LJ said.

The claimants argued that the costs order was unfair and "prohibitively expensive" under the Aarhus Convention.

Lord Justice Carnwath said: "In those circumstances, it was wrong in our view for the judge to award costs in favour of the defendants, simply because that is what he would have done if he had rejected the application in the first place.

"That ignored what had happened since, seen against the background of his own finding that the balance of convenience lay in favour of some form of interim protection, damages not being an adequate remedy.

"In a case of this kind, where the merits of the interim application were so closely tied up with the merits of the case overall, he should in our view have considered the desirability of leaving issues of costs between the principal parties to be sorted out when the final result was known."

Lord Justice Carnwath substituted an order that the costs of the defendants be reserved to the trial judge. Lord Justices Laws and Maurice Kay agreed.