Tuesday, 22 March 2011

Need for protective orders to overcome 'chilling effect' of costs

THis article appears relevant to planning given the Planning and Development (Amendment) Act 2010's changes.

There needs to be protection against excessive costs orders for those taking public interest cases in good faith, writes JO KENNY

IT IS a fact that not everyone can afford the high-risk game of litigation. But where a case provides an opportunity to clarify legal issues for a wider public benefit, the courts may relax the usual costs rules to enable a public interest matter to be heard.

Last year, the UK introduced a policy by which unsuccessful asylum seekers could be deported with little or no notice. Medical Justice, the non-governmental organisation which helps asylum seekers in immigration centres, legally challenged this policy. The English courts found part of the scheme unlawful on the grounds that it infringed access to justice.

One feature of the case that may have gone unnoticed is that, at the beginning, Medical Justice was granted what is known as a protective costs order, capping their liability for costs at £5,000, whatever the outcome. This meant they could proceed with litigation without fear of an adverse costs order they would be unable to pay.

In granting a protective costs order, the courts play their role in overcoming the so-called “chilling effect” of costs for public interest litigation. As Judge Toohey commented in Australia: “. . . there is little point opening the doors of the courts if litigants cannot afford to come in . . .”

In a case involving Cornerhouse, an organisation working against corruption, the English courts set out the relevant criteria to be satisfied for a protective costs order as: the issues raised are of general public importance; the public interest requires that those issues should be resolved; the applicant has no private interest in the outcome of the case; having regard to the financial resources of the applicant and the respondent(s) and to the amount of costs that are likely to be involved, it is fair and just to make the order; if the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in so doing.

The “no private interest” requirement has been subject to much criticism. Any applicant for judicial review is required to demonstrate “sufficient interest” to bring the claim.

This sits uneasily to say the least with the requirement to show lack of private interest.

Another potential difficulty relates to legal representation. In Cornerhouse, the court commented that recipients of a protective costs order that permits them to recover costs should incur only “modest costs”. They added that pro bono representation would enhance the merits of the application.

Yet this may cause difficulties for the legal representation that the applicant will be able to afford.

It also poses something of a quandary. If an issue is of public importance, it may well require senior as well as junior counsel – yet “modest costs” would seem to preclude this possibility.

To date, the Irish courts have considered the making of a protective costs order in two reported cases. Perhaps unsurprisingly, they declined to grant an order in both instances.

In Village Residents the court considered that the case was no different from many other planning judicial reviews, while in Friends of the Curragh the court found the matter involved applying familiar principles to new facts.

More developed case-law on protective costs orders has made clear the threshold for such an order is higher than this, requiring issues of legal complexity which go beyond the individual.

The Irish courts have, however, varied the usual costs rule after the event where they considered the public interest of the case to justify it. Curtin involved novel and crucial constitutional questions and raised serious issues around the separation of powers. The Supreme Court awarded the unsuccessful applicant half his costs.

Roche v Roche concerned frozen embryos and the right to life. The Supreme Court awarded the unsuccessful parties part of their costs on the grounds that the case raised a unique and exceptional issue of public importance, which “ . . . surpassed, to an exceptional degree, the private interests of the two parties . . .”

The Irish courts tend to deviate from the customary costs rules only in exceptional cases. Nowhere is this clearer than in Dunne, which concerned building a motorway through an area of archaeological note.

The Supreme Court overturned a High Court costs order on the basis that the case did not raise legal issues of special and general public importance. Needless to say, the after-the-event approach provides plaintiffs with no certainty as to costs, unlike the protective costs order.

Other common law jurisdictions have developed various means of overcoming the “chilling effect”.

In South Africa, where a constitutional case is taken in good faith, an unsuccessful plaintiff will not be ordered to pay costs.

Canadian courts can order the state to fund the costs of a public interest case. Australian courts enjoy the power to make a special order that caps costs recoverable by the respondent state in a public interest case.

The approaches may differ but what is interesting is that all these common law jurisdictions recognise the justification for modifying costs rules where a public interest issue is at stake.

This much is clear: there are options available to courts to facilitate hearing a matter which may benefit the wider public. If Medical Justice had not obtained a protective costs order, an important issue of access to justice may have gone unheard. A more nuanced approach is called for in public interest cases.

This is an abridged version of an article published in the January/February edition of the Law Society Gazette. It contains excerpts from the report “The costs barrier and protective costs orders”, which can be found at www.pila.ie.

Jo Kenny qualified at the English Bar. She worked in the British civil service and then Arthur Cox before joining the Free Legal Advice Centres (Flac) as legal officer at the Public Interest Law Alliance.

Irish Times


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