R (on the application of Edwards and another) v Environment Agency and others

Costs officers conducting a detailed assessment may assess only whether the receiving party’s costs are proportionate, reasonably incurred and reasonable in amount. They cannot reduce liability by applying the separate requirement that environmental proceedings must not be prohibitively expensive.

That requirement is for the court. It should preferably be addressed through a protective costs order at the outset, but the court may reconsider it after judgment and limit the paying party’s liability. A purely subjective inquiry into the particular claimant’s means may not satisfy the requirement. Since the correct test remained uncertain, a preliminary ruling from the Court of Justice was required.

The appellant unsuccessfully challenged an environmental permit for a cement works. The House of Lords dismissed her appeal in [2008] UKHL 22 and ordered her to pay the respondents’ costs. The respondents submitted bills totalling £88,100.

During detailed assessment, two Supreme Court costs officers decided that they could apply article 10a of the EIA Directive and article 15a of the IPPC Directive. They proposed to disallow costs which would make the proceedings prohibitively expensive. The respondents appealed under rule 53 of the Supreme Court Rules 2009.

The issues were whether costs officers could apply the directives after the court had rejected applications to cap liability, and whether the assessment of prohibitive expense should be subjective, objective, or a combination of both.

1. The costs officers’ ruling was set aside. Their jurisdiction under rule 49(1) of the Supreme Court Rules 2009 was limited to detailed assessment on the basis directed by the Court. Under the standard basis, they could consider whether the receiving party’s costs were proportionate, reasonably incurred and reasonable in amount. They could not introduce a different basis directed to whether liability would be prohibitively expensive for the paying party. The statutory power concerning legally aided parties under section 11(1) of the Access to Justice Act 1999 provided no analogy because no equivalent statutory direction applied here: paras 19–23, 26.
2. The court and the costs officers had distinct responsibilities. The court could decide whether costs were payable and whether the receiving party should recover less than the full amount assessed. The costs officers could assess the recoverable costs but could not vary the court’s costs order. The distinction explained in Lahey v Pirelli Tyres Ltd [2007] EWCA Civ 91 applied: paras 16–21.
3. The obligation that environmental review proceedings should not be prohibitively expensive should preferably be addressed by a protective costs order sought with permission or as soon as possible afterwards. Refusal of such an order did not prevent the court from reconsidering the matter at the end of the proceedings. The court could then cap the paying party’s liability without undertaking a detailed assessment: paras 23–25.
4. The House of Lords had used a purely subjective approach when refusing a protective costs order and, inferentially, when making the final costs order. In light of R (Garner) v Elmbridge Borough Council [2010] EWCA Civ 1006, it was at least questionable whether that approach fulfilled the directives. The balance appeared to favour an objective approach, but the proper test and its application to a second appeal remained uncertain: paras 29–33.
5. The Supreme Court inherited the House of Lords’ power to correct injustice caused by an earlier order. That power was available to correct injustice however it arose. As the correct test was not sufficiently obvious to exclude reasonable doubt, the issue would be referred to the Court of Justice under article 267 TFEU. The costs order of 18 July 2008 was stayed pending the reference: paras 34–36.

1. United Kingdom Supreme Court: Allowed the respondents’ appeal from the costs officers on jurisdiction, set aside their ruling, ordered a preliminary reference to the Court of Justice and stayed the House of Lords costs order: [2010] UKSC 57.
2. Supreme Court costs officers: Held that they could apply the Aarhus principles during detailed assessment and could disallow costs considered prohibitively expensive. That ruling was set aside.
3. House of Lords: Dismissed the substantive environmental appeal in [2008] UKHL 22 and subsequently ordered the appellant to pay the respondents’ costs.
4. Court of Appeal: Dismissed the environmental appeal in [2006] EWCA Civ 1138, having capped the appellant’s costs liability at £2,000.
5. High Court: Dismissed the original judicial review claim in [2005] EWHC 657 (Admin).