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Costs capping in judicial review – the future?

Laura Penny
22/09/2017
Following his 2010 report into costs in civil litigation, Lord Justice Jackson completed a supplemental report this summer on ‘Fixed Recoverable Costs’, with Chapter 10 focusing on costs in judicial review. The report is noteworthy for its suggestions on costs capping and budgeting, and the potential for such measures to alter the dynamic and types of application for judicial review.

Following his 2010 report into costs in civil litigation, Lord Justice Jackson completed a supplemental report this summer on ‘Fixed Recoverable Costs’, with Chapter 10 focusing on costs in judicial review. The report is noteworthy for its suggestions on costs capping and budgeting, and the potential for such measures to alter the dynamic and types of application for judicial review.

Capping costs

Costs in judicial reviews have historically adopted the traditional mechanism whereby the loser pays the winner's costs. Under the 'Aarhus Costs Rules' costs capping in judicial review was originally limited to environmental claims and in February 2017 was extended to cover some planning cases. The rules currently cap a claimant's costs liability at £5,000 (£10,000 when the claimant is a business) and a defendant's at £35,000. It is for the claimant to decide whether to invoke the Aarhus rules in these cases and in order to do so they must submit a statement of means detailing any financial support provided to them by others.

Jackson has suggested that these costs capping rules should be extended to apply to all judicial review claims. The regime would be available to any claimant who (a) opts in, and (b) is an individual who does not have access to legal aid. Both the claimant and defendant would have the opportunity to vary the cap and as per the Aarhus rules there would be a form of means testing for claimants. Legal aid is still to be available for judicial review claimants but Jackson hopes that an extension of the costs capping rules will allow deserving and modest claimants an opportunity to pursue their claims where they would otherwise not qualify for legal aid.  

The rationale behind the proposal is to ensure that members of the public are able to challenge the decisions of the executive "without facing crushing costs and liabilities if they lose". This reflects the importance of judicial review as part of the democratic process of ensuring public accountability.  Jackson accepts that defending judicial review claims can put "a substantial burden on the public purse" but that "many (but by no means all) claimants are of modest means and are deterred from pursuing claims because of the adverse costs risk".

Costs budgeting

Jackson proposes that in cases where a judicial review involves a complex point requiring a substantive hearing lasting several days, costs budgeting should be utilised to limit the expenses incurred by either party. Jackson refers to such cases as 'heavy' judicial review claims. Costs budgeting is currently used in other forms of civil litigation where parties are required to present their budget to the court and their opponent at an early stage in the case. This budget has to be approved by the court and if costs exceed it, it is for that party to justify why, and these costs may not be recoverable. The proposal suggested in judicial review cases reflects a more simplified version of costs budgeting, and this would only be utilised in those 'heavy' judicial review cases when a party requests it, or when it is ordered by the court.

What next?

Legislative amendment will be required to adopt the suggested reforms. It remains to be seen whether the Government chooses to implement the proposals during an almost unprecedentedly turbulent period in parliamentary history.

The extension to costs capping in all judicial reviews could serve to embolden claimants who would previously have been deterred from challenging a decision due to the costs implications. On the other hand, it could mean that some claimants are deterred from pursuing more complex cases due to the difficulty in recovering their full costs. In some ways, the proposals could be said to be more defendant friendly, in that public authorities are generally in a position of financial strength by comparison to individual litigants, and will now have the buffer of the cap on claimant's costs. It remains to be seen whether this will be offset by an increase in claims more generally.

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