The Supreme Court has cleared the way for the Court of Justice of the European Union (CJEU) to cut the cost of environmental actions by claimants.
The court was ruling today in a complex costs dispute, which centred on the UK's need to comply with the Aarhus Convention of 1998. Article 9 of the convention states that environmental litigation in Europe must not be "prohibitively expensive".
Delivering the judgment of the Supreme Court costs panel in R (on the application of Edwards and another) v The Environment Agency , Lord Hope ruled that the House of Lords had used the wrong test when making a costs order in the case.
"The appellant has submitted that, taken overall, no clear and simple answer is available to the question what is the right test," he said. "That indeed does seem to be the position."
Lord Hope said the House of Lords, which refused the claimant a protective costs order, had taken an approach to the issue which was "purely a subjective one". He said the Aarhus Convention compliance committee had written to the UK in October, saying that in legal proceedings covered by article 9 of the convention the public interest nature of the claims was not being given sufficient consideration (see Solicitors Journal 154/35, 21 September 2010).
Lord Hope said the subjective test had also been ‘disapproved' by the Court of Appeal in the Garner case (see the same article).
"It is clear that the test which the court must apply to ensure that the proceedings are not prohibitively expensive remains in a state of uncertainty," he said.
"The balance seems to lie in favour of the objective approach, but this has yet to be finally determined."
The Supreme Court ruled that the costs order made by the House of Lords should be stayed pending reference to the CJEU for a preliminary ruling. Sitting alongside Lord Hope on the costs panel were Lords Walker, Brown, Mance and Sir John Dyson.
Richard Buxton, who runs his own environmental law practice, acted for the claimant.
"The fear of paying the costs of an opponent, often a big organisation with expensive lawyers, makes most people think twice before they venture off to court," he said.
"For many years this has been a particular impediment for cases about the environment, where people being altruistic are even less likely to want to risk losing lots of money."
Buxton predicted that the CJEU would favour an approach which made justice affordable.
"The spectre of adverse costs should not have a ‘chilling effect' on those who seek the court's help in protecting the environment."