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The Administrative Court has held in R (Harvey) v Leighton Linslade Town Council [2019] EWHC 760 (Admin) that the obligation on an applicant for a costs capping order in respect of judicial review proceedings to disclose their "financial resources" includes resources that might not be immediately available to them, such as a potential inheritance.
The claimant, who was in receipt of Employment and Support Allowance benefits, sought permission to apply for judicial review of her local authority's decision to revise market pitch fees and made an application for a costs capping order (CCO).
A CCO is an order limiting or removing the potential liability of a party to judicial review proceedings to pay another party’s costs (section 88(2) of the Criminal Justice and Courts Act 2015). When considering whether to make a CCO, the court must have regard to, among other things, the financial resources of the parties and must be satisfied that:
- the proceedings are 'public interest proceedings';
- in the absence of the order, the claimant would withdraw the application for judicial review or cease to participate in the proceedings; and
- it would be reasonable for the claimant to do so.
The court held that these conditions were satisfied and granted a CCO limiting the costs that the local authority could recover from the claimant – if it was successful – to £4000.
After the CCO was granted, the defendant became aware that there was a prospect of the claimant receiving a substantial sum from the estate of her father, who had died five months before the CCO application. The claimant had not disclosed her prospective inheritance to the court at the time of her application and the defendant applied for the order to be set aside or varied on the basis that there had been material non-disclosure.
The meaning of "financial resources"
The court held that the requirement on the applicant for a CCO to provide information about their financial resources extends to resources which may not be immediately available at the time of the application and may not be in the applicant's possession at the time. The court stated that resources include "assets or income or other monies which a party might be able to obtain or has an expectation of coming into possession of within a reasonable period (to be measured against the likely timescale of the litigation)", such as a prospective inheritance.
Jurisdiction to set aside or vary the CCO
The court found that the applicant's failure to bring the judge's attention to the potential inheritance, while not deliberate, constituted a failure to give disclosure as required by the Criminal Justice and Courts Act 2015. The court held that it had jurisdiction to review the grant of the CCO under Civil Procedure Rule 3.1(7), although the CCO did not necessarily have to be set aside.
On the facts of the case, the court held that, if the information had been disclosed, it might have affected the judge's decision about whether the claimant would have withdrawn the proceedings if there was no CCO and whether it would have been reasonable to do so. The order was therefore set aside and the court made a fresh decision on the basis of the information that had subsequently been disclosed. A new CCO was made in the sum of £20,000.
The case provides important clarification on the scope of the financial information that is expected to be disclosed by an applicant for a CCO in judicial review proceedings. If you are applying for a CCO, you should ensure that you make full disclosure of your financial resources, including those that you may or expect to obtain around the time of the litigation. If you are a defendant, you will have grounds to challenge a CCO granted on the basis of incomplete information.