Ireland: What "Not Prohibitively Expensive" Means In Terms Of Assessment Of Costs In Environmental Cases: The Edwards Case.

Last Updated: 1 July 2013
Article by Deborah Spence and Maeve Larkin

The Queen on the application of Edwards and Pallikaropoulos –v– Environment Agency, First Secretary of State and Secretary of State for Environment, Food and Rural Affairs

CJEU Case C-260/11

The Court of Justice of the European Union ("CJEU") has recently delivered a judgment on the requirement that litigation in environmental matters should not be "prohibitively expensive". The judgment is expected to have significant impacts on legal costs in litigation involving environmental concerns in Ireland, particularly where individual members of the public are involved.

Background to the Edwards case

Edwards and Pallikaropoulos took proceedings against the Environment Agency and others, challenging a decision of the Environment Agency to issue a permit for the operation of a cement works. Their case was dismissed on appeal and, in the normal way, the House of Lords (now the UK Supreme Court) ordered Edwards and Pallikaropoulos to pay the costs of the opposing parties, which were disputed and amounted to more than Ł88,000.00. In the course of the disputed costs hearings the Supreme Court referred a number of questions to the CJEU for a preliminary ruling.

The questions involved the interpretation of Article 9(4) of the Aarhus Convention, as implemented by Article 10a of the EIA Directive and the IPPC Directive. The key question concerned the meaning to be given to the phrase "the requirement that judicial proceedings in environmental matters should not be prohibitively expensive" (the "NPE Requirement").

CJEU Decision

The CJEU delivered its decision on 11 April 2013. It began by clarifying, by reference to the decision in Commission v. Ireland (Case C-427/07), that the NPE Requirement does not prevent an order for costs being made. Costs, it stated, must be assessed as a whole, taking into account all costs involved in the proceedings. Due to the necessity for uniform application of EU law, the CJEU found that it was not a matter for national laws alone to decide how the cost of litigation is to be assessed in order to establish whether the cost is prohibitively expensive.

The CJEU stressed the importance of the NPE Requirement, as it underpins the right to an effective remedy as set out in Article 47 of the Charter of Fundamental Rights of the European Union, and facilitates the objective of the EU legislature which is to ensure wide access to justice. It held that a person should not be prevented from taking a case because of the financial burden that might result. Where a national court has to make an order for costs in an environmental matter against an unsuccessful applicant who is a member of the public, or has to give its opinion on the capping of costs, it must satisfy itself that the result would not be prohibitively expensive. The criteria to inform this decision were then set out in detail.

Criteria to be applied

In assessing the NPE Requirement a national court must adopt a combined objective and subjective approach. In addition, the criteria to be applied will have both obligatory and discretionary elements:

A national court must take account of:

  • not solely the financial situation of the person concerned but also an objective analysis of the costs, so that the costs of litigation must neither exceed the person's financial resources nor appear to be objectionably unreasonable;
  • both the interest of the person attempting to defend his/her rights and the public interest in the protection of the environment particularly because members of the public and associations are required to play an active role in defending the environment; and
  • any relevant provisions of national law, such as legal aid schemes or costs protection regimes available in the Member State in question.

A national court may take account of:

  • the situation of the parties;
  • whether the claimant has a reasonable prospect of success in his/her case;
  • the importance of what is at stake for the claimant and for the protection of the environment;
  • the complexity of the law and procedure; and
  • the potentially frivolous nature of the claim.

The CJEU found that the fact that a claimant has not, in practice, been put off from pursing the litigation is not enough to determine that the proceedings were not prohibitively expensive, as far as that claimant is concerned. The CJEU also stated that there should be no difference in the assessment to be made depending on when the assessment is being made – i.e. at first instance, at an appeal stage, or at second appeal stage. Such an approach is not, it stated, set out in the EIA or IPPC Directives and would not comply with the objective of the EU legislature.

The matter was ultimately referred back to the UK Supreme Court to make a decision on the costs.

Our Commentary on Implications for the Irish courts

While the NPE Requirement has existed in EU legislation for many years, this is an important judicial statement of the criteria to be employed in making an assessment of the NPE Requirement. The judgment is therefore expected to be brought into play in the awarding of costs in environmental matters adjudicated before Irish courts. Its impact will most likely be felt in cases brought by individual members of the public and NGOs for whom costs will be a significant issue. It will most likely be considered a form of guidance of persuasive authority in analysing the costs in environmental cases. But it is by no means a complete answer to the often vexed issue of costs.

The Edwards judgment leaves us with many questions yet to be answered in practice, amongst which are:

  • What will be the split between the subjective and objective assessments of the level of costs?
  • While the subjectivity involved in assessing the capacity of the person in question to pay the costs is sensible, will this encourage a consistent stream of impecunious applicants, in particular where the chances of success are low?
  • Might the inclusion of criteria concerning the strength of the case in question, the prospects of success and the importance of what is at stake result in fewer unmeritorious cases being pursued, and a focus on stronger cases which involve the consideration of important legal questions?
  • Will this case spur on the introduction of formal cost protection orders and a more wideranging civil legal aid mechanism to assist potential applicants?
  • How will this judgment be viewed in light of the recently amended Section 50B of the Planning and Development Act 2000 (as amended) and sections 3 and 4 of the Environment (Miscellaneous Provisions) Act 2011, which provide that, subject to some exceptions, each of the parties to proceedings on environmental matters should bear their own costs?

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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