British Union for the Abolition of Vivisection, R (on the application of) v Secretary of State for the Home Department

A protective costs order may be made where the five governing conditions identified in R (Corner House Research) v Secretary of State for Trade and Industry are satisfied. The requirement that such orders are confined to the most exceptional circumstances is an umbrella description of those conditions, not an additional sixth test requiring exceptional public importance. The applicant need not show that an adverse costs order would cause financial collapse. The court must assess the applicant’s and respondent’s resources, the likely costs, the public importance of the issues, the public interest in resolving them, the applicant’s private interest, and the likelihood that proceedings would otherwise be reasonably discontinued.

The claimant, a public-interest organisation, sought a protective costs order in judicial review proceedings challenging licences granted to Cambridge University under the Animals (Scientific Procedures) Act 1986. Permission had been granted on four grounds, and the substantive proceedings involved substantial existing and projected costs. The claimant submitted that it had no private interest in the outcome and would probably discontinue if exposed to the defendant’s full costs.

The central issue was whether the conditions governing protective costs orders were satisfied and, if so, what costs cap was fair and just.

1. Application granted in part. The court made a protective costs order capping the claimant’s liability for the defendant’s costs at £40,000. The claimant’s costs relating to the application were costs in the cause; other costs were reserved to the trial judge.
2. The governing principles were those stated in R (Corner House Research) v Secretary of State for Trade and Industry [2005] 1 WLR 2600. The issues had to be of general public importance; the public interest had to require their resolution; the applicant had to have no private interest in the outcome; it had to be fair and just to make the order having regard to resources and likely costs; and the applicant would probably have to discontinue, reasonably, if protection were refused.
3. The reference in R v Lord Chancellor, ex p Child Poverty Action Group [1999] 1 WLR 347 to the most exceptional circumstances did not establish a sixth requirement. It described the exceptional nature of the jurisdiction, which was defined by the five Corner House conditions.
4. The existence of detailed assessment did not remove the need for a protective costs order. Detailed assessment addressed whether costs were reasonably incurred, but did not address the applicant’s means or the public interest in the litigation.
5. A not-for-profit organisation’s substantial turnover, reserves, or ability to avoid liquidation did not disqualify it. Financial resources were relevant, but financial failure was not required. The court accepted that the issues were of general public importance, that the public interest required their resolution, that the claimant had no private interest, and that it would probably discontinue without protection.
6. The proposed £20,000 cap was too low in relation to likely costs of approximately £100,000 to £120,000. Balancing all relevant factors, a £40,000 cap was fair and just.