Disclaimer: This has been written from my bed whilst on sick leave, so please be patient!
The phrase ‘legal costs’ makes everybody nervous, even lawyers, who often find them difficult to explain to their clients, especially when the client ‘wins’ and must still pay a lot of money for their day in court. Of course the loser is worse off, because he not only has to pay his own lawyers, but he must pay the legal costs of the other side as well.
That is the general rule: the loser pays all the legal costs. This is known as the “costs follow the event” rule. There are some exceptions to the rule, and I will not discuss those here, but that is what they are – exceptions – the rule stands firm.
This is especially so in Ireland, unlike other countries which have developed special rules in public interest cases. I know from my own experience that in South Africa the rule is that the unsuccessful applicant who challenges the State will not have to pay the costs of the State if that case involved constitutional issues that impacted on the public interest (the famous Biowatch case where an NGO went up against, apart from various government departments, Monsanto, recently described as the ‘most hated company in the world’). See http://www.saflii.org/za/cases/ZACC/2009/14.html
However, our Supreme Court has expressly refused to lay down any rules (Curtin v Clerk of Dáil Eireann & Ors  IESC 27, Dunne v Minister for the Environment, the Attorney General and Dun Laoghaire-Rathdown County Council  IESC 60), leaving the court hearing the matter with full discretion concerning the awarding of costs. This means that prediction is impossible, and the chance of the ‘costs follow the event rule’ coming into play more probable than not.
And that is a scary thought for any potential litigant, the threat of not only losing your case but being saddled with the costs of your opponent’s lawyers. This is especially the case in environmental litigation, where the applicant is a voluntary group operating on a shoestring budget, usually collected through community fund-gathering events like cake sales, table quizzes and film shows, and of course the collection plate.
And what of their opponents? Well, they range from large energy companies or multinationals with multi-million budgets; and then of course there is the government itself, whose legal costs are paid by the taxpayer, whether they win or lose.
This clearly has the effect of frightening off the majority of people and/or communities who wish to challenge the latest institutional rape of their environment and their natural resources.
As the jurist Sir James Mathews famously said:
“Justice is open to all, like the Ritz Hotel.”
There have been efforts to remedy this travesty. Perhaps the most well known of these, at least where environmental litigation is concerned, is the so-called “protective costs order” (PCO), a common-law creation which can be used by a judge if he or she deems it appropriate.
Without getting too technical, and depending in which common law country you litigate, the PCO can do one of three things, (in order of preference for the plaintiff):
– If the plaintiff loses it will pay no costs but if it wins it will get costs in the ordinary way;
– Win or lose, each side pay their own costs (“No Order as to Costs”);
– The party that loses will pay costs up to a specified amount (“capped costs”).
That is the theory in any event. The first type is very rare, the second sometimes is ordered, which is not that often. The third is used in Canada and sometimes Australia. In Ireland, in the rare case where the PCO is used, it is generally the second option. Of course, even while this removes the fear of paying the other side’s costs, there is still the problem of being able to afford your own costs. At the moment, the “start-up budget” for a High Court challenge seems to range between fifty thousand and a hundred thousand euro.
If you cannot afford to go to court in the first place, the threat of paying your opponent’s costs does not arise, but for the wrong reasons. The words of Sir James Mathews ring true.
Many people thought that this situation would improve with the passing of the Aarhus Treaty, more particularly the obligation in Article 9 that the costs involved in (environmental) judicial review procedures must not be ‘prohibitively expensive.’
Unfortunately, but predictably, the Irish government failed to transpose this obligation into our law. It actually had the gumption to argue that the existing discretion of the court was sufficient to fulfil this obligation. This pathetic argument received the beating it deserved from the European Court of Justice ((Case C-427/07 Commission v Ireland  ECR I-6277).
With its tail between its legs, the government reluctantly introduced Section 50B to the Planning and Development Act which purported to introduce a special costs regime for cases involving decisions on matters covered by the EIA Directive, the IPPC Drective, or the Strategic Environmental Assessment (SEA) Directive (which also have the ‘prohibitively expensive’ clause). This was thereafter amended / refined by the Environment (Miscellaneous Provisions) Act of 2011.
This ‘special regime’ means that in certain cases each side gets to pay their own costs. As Hogan J. in Kimpton Vale Developments Limited v. An Bord Pleanála  IEHC 442 stated, Section 3 of the 2011 Act:
“introduces a new default rule whereby, absent special circumstances, the normal rule will be that of no order for costs”.
However, the notion of “special circumstances” still means there is judicial discretion involved, but perhaps not as much as before the legislation. The question is just how much judicial discretion is still retained? This question means that there is still uncertainty and nervousness on the part of community organisations and the like who wish to stop the now seemingly endless acts of environmental terrorism perpetrated by this government and their corporate cronies. On the positive side, this uncertainty has decreased, as evidenced by the number of applications for judicial review of some dodgy decisions by An Bord Pleanala.
Two recent judgments of the High Court might shed some light on the thought patterns behind the judicial discretion. The parties are the same in both judgments, with Baker J. presiding. The first judgment involves the application for the statutory costs order, and merits the closest consideration, whereas the second involves the form and content of that application in relation to the costs of the application itself.
The background to the case is relatively straightforward. The applicant brought an action in terms of Section 160 of the Planning and Development Act 2000, against the respondents who own / operate a quarry at Ballinascorney Upper, Brittas, Co. Dublin. The applicant is a resident of adjoining lands and is trying to stop the quarrying which he claimed was being done without the proper planning permission in an area of great natural beauty and ecological sensitivity.
In McCoy & anor -v- Sillelagh Quarries Limited & ors  IEHC 511 the Court considered whether the matter qualified for the statutory costs order (each side to pay their own).
The respondents’ first argument was that because they commenced the quarrying operations in 1963, and the first Planning Act only commenced in 1964, the quarry did not need planning permission and therefore there was nothing for the applicant to enforce. The Court rejected this argument and held that Section 3 of the 2011 Act was broad enough to cover instances where there was no planning permission at all. Baker J. agreed with a previous interpretation of Section 3 by Hedigan J. in his judgment of Holly Hunter v. Nurendale Limited t/a Panda Waste  IEHC 430 that
“as a matter of interpretation that a declaration may be made by a court in proceedings seeking the enforcement of a statutory requirement that planning permission be in existence for a particular use of land. The statement of Hedigan J. that an application under s. 3 may be made in cases where the applicant claims that no planning permission exists where one is mandated seems to me to be correct.”
Accordingly the applicant was entitled to make the application. This is of tremendous importance as there have always been concerns about whether the statutory costs order could apply to cases where no planning permission existed as opposed to the instance where planning permission was not being obeyed.
The respondents’ second argument was that the application was premature as the trial had not yet started and a statutory order of costs would restrict the discretion of the trial judge. Baker J. rejected this argument in its entirety as the section is clear that the application can be brought at any time before, during or after the trial, and despite the order being made, the trial judge retained his or her discretion to award the appropriate order of costs if the conduct of either of the parties, or the ensuing merits of the case, justified another order.
The next question was whether the applicant had a real or reasonable prospect of success? Baker J. approved of the following test set out by Hedigan J:.
“Hedigan J. made it clear that the bar was not as low as requiring that the application not be frivolous or vexatious, but not as high as the test set out in McNamara v. An Bord Pleanala (No. 1)>  2 ILRM 125, i.e. that the case be reasonable, arguable, weighty and not trivial or tenuous. The proceedings must be substantive, have a certain measure of substance and there must be a reasonable prospect of success. This approach accords with the general aim of the Aarhus Convention and the desirability that the State would provide access to justice for actions which reasonably may be said to protect the natural or built environment.” (my bold).
In essence the applicant would need to show that the level and nature or intensity of the quarrying had materially altered since it began in 1963 and that accordingly planning permission should have been subsequently obtained. The respondent argued that the activity in which it was engaged was not of any greater intensity having regard to population increases and that contemporary extraction methods differed from those in use before 1964.
Baker J. held that:
“How the evidence will evolve and how ultimately the substantive proceedings will be determined is a matter that does not concern me and I am satisfied that the evidence points to the applicant having more than a fair issue to be tried and that he has a reasonable prospect of success.”
Finally, the court had to be satisfied that the application was for the protection of the environment rather than the protection of some private interest – in other words, that it was a public interest case.
Baker J. held that:
“The court must be satisfied that the questions in this case are environmental questions of public importance, that the issues concern the environment and not merely the private ownership or enjoyment of land. I am satisfied that this test is met and does not require the balancing of the possible evidence or assertions by the parties but merely that the court be satisfied that the proceedings relate to the general public interest in the environment and not to private enjoyment of land.” (my bold)
And now to the nitty-gritty. The Court was satisfied that the section applied, but there was still the question as to whether the applicant deserved the statutory costs order? This is where the exercise of judicial discretion is paramount.
Baker J. again relied on the judgment of Hedigan J. in Holly Hunter v. Nurendale Limited t/a Panda Waste regarding the averments and evidence that an an applicant should show the court in the application.
“He pointed out that the court had to consider the situation of the parties and in that a case he had evidence that the applicant was impecunious and it was reasonable to believe she could not meet any order for costs that might be awarded against her.
He said that in general, the court would look to the resources of an applicant bringing proceedings in an environmental matter but that the court must “not act solely on the basis of the applicant’s financial situation but also take into account the amount of the costs involved”. He said, albeit obiter, but in a strong statement of principle, that an applicant ought to set out broadly what their financial situation is so as to assist the court in making an assessment.”
The applicant Mr McCoy had set out in his application that he was a full-time student and was not a person of “substantial means”. Although he did not identify if he was the owner of the property in which he resides, or the source or extent of his income, Baker J. was satisfied that this was enough to show that his resources were limited.
“I do not think it was the intention of Hedigan J. in outlining the proofs to require that a person would disclose the intimate and private elements of his or her financial circumstance.”
“It does not require any great analysis or debate for this Court to accept that a student who describes himself as not having financial means would not be in a position to meet the costs of a High Court case involving very complicated issues of fact and law.”
The respondents criticised the applicant for not supplying an estimate of the costs of the trial, as stipulated by Hedigan J. Again, Baker J. set the qualifying bar at a relatively modest level:
“In para. 8 of the grounding affidavit, the applicant avers to the fact that the respondents have engaged both junior and senior counsel and have indicated that they intend filing between five and six replying affidavits. This has been borne out by the argument before me and indeed the highly technical nature of the affidavits in the substantive proceedings.
In particular, the applicant says that previous enforcement proceedings were “very costly” and goes on to say that it is “likely that the costs in these proceedings will be significant”. My view is that this is a sufficient averment in this particular case as it is possible for me to extrapolate that the costs will be very high from the long history of proceedings of which the applicant has some knowledge, and he was in a position to give direct evidence that the previous litigation was, as he put it “very costly”, and because I have had the benefit of reading the substantial and technical affidavits sworn to date in the substantive proceedings. There may be cases where there was no such history and indeed many cases where at the time of the application for a declaration the court could have no real sense of the extent and difficulty of the legal argument and technical evidence that might be before the trial judge. In this case, the circumstances are different and twelve replying affidavits have been served to date of which three are lengthy and contain highly complex evidence of a technical nature, two of them from a Tim Paul, chartered mineral surveyor, and from a Joseph Bonner, town planning consultant. It seems probable that costs will be high indeed if the matter runs to a full hearing, and at this stage it appears from submissions that not only will the matter run to full hearing, but that it will likely run on oral hearing.”
The respondents also argued that the fact that the local authority had now joined the proceedings as co-applicant meant that a statutory costs order was premature as the council had “deep pockets” and also the council was not covered by Section 3 of the 2011 Act. The judge made it clear that the order would benefit the original applicant, Mr McCoy, and that the making of the order did not remove the discretion of the trial judge to make an appropriate order of costs should the conduct of the parties at trial or the outcome of the trial warrant it.
“It seems to me that the trial judge’s discretion is sufficiently wide to offer protection to both the applicant and the respondents should a declaration be made at this stage in favour of Mr. McCoy, and indeed it seems to me that the making of such a declaration does not prevent an argument that the interest of justice may ultimately mean that a costs order be made in favour of or against Mr. McCoy especially in the context of the addition of an additional party. Thus the interests of the respondents are also protected.
It must be borne in mind that while South Dublin County Council has now been joined as co-applicant, the first applicant has no control over how the County Council conduct the case and indeed it is possible that the County Council could come to a compromise with the respondents which would then leave the first applicant with the choice whether to continue the proceedings or not. These two applicants therefore are, at least at this stage of the proceedings, separate, and are entitled to and may well choose to conduct the case in a different way and on a different factual and legal basis.”
For similar reasons Baker J. refused to make a limited order for costs up to when the council joined the proceedings.
The judge concluded:
“… this seems to me to be a proper case in which to make a declaration. The application before this Court must take into account the purpose of the Aarhus Convention and s. 8 of the Act of 2011 expressly requires that judicial notice shall be taken of that Convention. The purpose of the Convention, and this is reflected in the short title to the Act of 2011, was to facilitate public access to justice in environmental matters. In essence what the applicant seeks is a degree of comfort that he may now proceed with this case and prepare for trial without the fear should he lose, the costs would be awarded against him and one must assume that the award of costs could have significant and possibly even catastrophic results for the applicant. The making of an order has the effect that he must bear his own costs and cannot, without being able to argue that one of the exceptions in s. 3(3) apply, hope to recover his costs even should he succeed. Thus a degree of comfort to both parties exists once an order is made, and that mutuality also informs the court in its power to make an order.
Accordingly, I will make the order sought.”
In the second judgment, McCoy & anor -v- Sillelagh Quarries Limited & ors  IEHC 512, having dealt with the factors considered in deciding whether an application fell within the remit of the special regime as previously described, Baker J. considered the form and extent of the application asking that a case be determined (as to costs) in terms of that legislation.
The learned judge held that the statutory order was different from the common law CPO, in that the “statutory costs order is more in the form of a costs limitation order and no rules of court as yet govern the means by which an application for a declaration may be made”. The judge must have bitten her tongue at this point given that almost three years have elapsed since the legislation was passed and still no rules of court – an indication of just how seriously this government views its Aarhus obligations and other similar obligations in terms of the previously mentioned Directives.
The judge thereafter continued:
“The Act in s. 7(5) provides that the application should be made by notice of motion, and the applicant in conformity with this provision, made application by motion grounded on his own relatively short affidavit. The fourth defendant swore an affidavit in reply saying that the application was “wholly misconceived”, and that the proceedings were not within the class of proceedings to which section 3 of the Act of 2011 applied. Thus far the affidavit evidence raised the correct tests for the court in determining the application for the declaration. However the respondent also submitted a lengthy affidavit to the court from an engineer, and other affidavits which went to the merits of the substantive claim under section 160 of the Act of 2000, and this had the effect of lengthening the hearing and complicating the matters argued before me unnecessarily.”
The judge scolded the defendant for the unnecessarily long and complicated supporting affidavit, which had simply increased the costs of the application hearing as the plaintiff was then forced to reply to all the matters raised in the respondent’s affidavit. She also pointed out to the respondent that it was possible for the parties to agree beforehand that the original action was covered by the ‘special regime’ provision in the 2011 Act thus avoiding the necessity for this application altogether. The plaintiff had attempted to have this agreed, but the defendant had rebuffed these efforts.
As a result of the respondent’s behaviour, the learned judge ordered that the applicant was entitled to his legal costs for the application and, as it was determined that the original action was covered by the 2011 Act, this meant that barring an exercise in discretion by the trial judge because of the conduct of one of the parties or perhaps because of an overwhelming victory by one of the parties (which might suggest frivolity or vexatiousness) each side would pay its own costs for the trial.
Whilst an element of judicial discretion has been retained, these judgments of Baker J. (read with the judgment of Hedigan J.) certainly provide a good deal of guidance to an individual or organisation wanting to take on the might of the government or one of its corporate henchmen in an effort to halt further environmental destruction.
Now all you have to do is raise that fifty thousand bucks. And for those efforts, I salute you. Until this government (or the next, as this one is dead on its feet) replaces the current High Court review procedure with something a lot cheaper, a lot faster, and a lot more accessible, Ireland remains in flagrant violation of the Aarhus Treaty.
For more on Article 9 see my previous blog https://the-law-is-my-oyster.com/2014/09/23/the-aarhus-treaty-act-now/ and the submissions to the DCENR at http://www.environ.ie/en/Environment/AarhusConvention/PublicConsultation/SubmissionsReceived/