Corner House Research, R (on the application of) v Secretary of State for Trade & Industry

A protective costs order may be made in exceptional public law proceedings where the claim has a real prospect of success. The issues must be of general public importance, their resolution must be in the public interest, and the applicant must have no private interest in the outcome. The court must also consider the parties’ resources, the likely costs and whether refusal would probably cause the applicant reasonably to discontinue.

The order remains discretionary and must be fair and just. Where a successful applicant would seek its costs, the protection should ordinarily be balanced by a modest cap on its recoverable costs, including any conditional-fee additional liability. The jurisdiction enables competent presentation of an important case without exposing the applicant to prohibitive financial risk.

Corner House Research, a non-profit public-interest organisation, sought judicial review of changes to the Export Credit Guarantee Department’s anti-bribery procedures. It alleged that the Department had consulted exporters extensively while denying consultation or dialogue to organisations with relevant anti-corruption expertise, contrary to public law fairness and the Department’s published consultation policy.

Davis J held that the claim was arguable but refused a protective costs order in [2004] EWHC 3011 (Admin). The claimant appealed because its limited resources meant that exposure to the respondent’s costs would cause it to abandon the proceedings. The central questions were the principles governing protective costs orders in public law litigation, the appropriate merits threshold, and whether the claim satisfied those principles.

1. Appeal allowed. The claimant was granted a protective costs order preventing the defendant from recovering its costs of the judicial review. The claimant’s recoverable costs were capped in accordance with King v Telegraph Group Ltd [2004] EWCA Civ 613.

2. The court had jurisdiction under section 51 of the Supreme Court Act 1981 and rule 44.3 of the Civil Procedure Rules to make a prospective order affecting the parties’ liability for costs. Public law litigation differs from ordinary private litigation because the public has an interest in the elucidation of public law and the vindication of the rule of law.

3. A protective costs order may be made at any stage and on appropriate conditions where: the issues are of general public importance; the public interest requires their resolution; the applicant has no private interest in the outcome; the parties’ resources and likely costs make the order fair and just; and refusal would probably cause the applicant reasonably to discontinue. The jurisdiction remains exceptional and discretionary. Pro bono representation may enhance an application, but the possibility that the applicant’s lawyers might act without charge does not eliminate exposure to the opponent’s costs.

4. The merits threshold stated in R v Lord Chancellor ex p CPAG [1999] 1 WLR 347 was too high. The court need only be satisfied that the judicial review has a real, rather than fanciful, prospect of success and that making the order is in the public interest. A requirement to assess whether a complex claim is very strongly arguable after short argument would generate disproportionate ancillary litigation and impede justice.

5. The challenge raised issues of general public importance concerning taxpayer-backed export business, bribery controls and compliance with an open governmental consultation policy. The claimant had no private interest, possessed very limited unrestricted funds and would reasonably have withdrawn without protection. Its complaint of one-sided consultation had a real prospect of success.

6. Where an applicant seeks its costs if successful, the order should ordinarily impose a reciprocal cap covering all recoverable costs, including any conditional-fee additional liability. The cap should permit reasonably competent but modest representation. The jurisdiction does not extend to requiring the defendant to finance the claimant’s costs as the litigation proceeds.

1. Court of Appeal (Civil Division): The court allowed the appeal, set aside the refusal of protection and granted a protective costs order with a cap on the claimant’s recoverable costs: [2005] EWCA Civ 192. The underlying judicial review was subsequently disposed of by consent without a judicial determination of its merits.

2. Administrative Court: Davis J refused the claimant’s application for a protective costs order and refused permission to appeal, while extending the interim protection to cover an application to the Court of Appeal: [2004] EWHC 3011 (Admin).

3. Administrative Court: Beatson J had earlier granted interim costs protection and directed a rolled-up hearing of permission and the substantive judicial review.