Courts must “do their utmost” to discourage satellite costs litigation




Solicitors Journal



Courts must do all they can to avoid satellite costs litigation in civil cases, the Court of Appeal has said.

The case involved a dispute over a protective costs order (PCO) made by the High Court in favour of the insect conservation charity Buglife.

Buglife launched a judicial review to save from development a brownfield site in Thurrock, Essex, which is regarded as one of the top three in the country for rare invertebrates.

Delivering judgment in R (on the application of Buglife) v Thurrock Thames Gateway Development Corporation [2008] EWCA Civ 1209, the Master of the Rolls, Sir Anthony Clarke, said that neither party had followed the correct procedure in responding to the High Court decision.

"In our opinion the courts should do their utmost to dissuade parties from engaging in expensive satellite litigation on the question of whether PCOs, and thus cost capping orders, should be made.

"The expenditure of such costs cannot be in the public interest."

Sir Anthony said judges in the administrative court had considerable experience and their decisions should not be revisited save in exceptional circumstances, as the Court of Appeal made clear in R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192, [2005] 1 WLR 2600.

"In the rare case in which it is necessary to have an oral hearing, it should last a short time as contemplated in Corner House and it should take place in good time before the hearing of the substantive application for judicial review so that the parties may know the position as to their potential liabilities for costs in advance of incurring the costs."

Buglife's application for judicial review was rejected by the High Court, which ordered that there should be an upper limit of £10,000 on the amount of costs recoverable by the development corporation. The order was reciprocal, so that Buglife's lawyers could only reclaim £10,000.

Buglife appealed against rejection of the judicial review, and against the PCO, arguing that it should not be subject to the £10,000 limit.

The Master of the Rolls dismissed Buglife's appeal against the original PCO, and granted a further PCO capping the costs recoverable on the appeal proceedings to £10,000, again on a reciprocal basis.

Leading environmental lawyer Richard Buxton, who runs his own practice in Cambridge, acted for Buglife. He said he regarded the outcome as a draw.

"If we succeed in this appeal we are not going to get paid very much," he said. "Our clients are a charity and cannot afford the shortfall."

Buxton said that without the PCO the firm would have to withdraw from the case completely. "This is a very important judicial review which goes to the heart of how our nature conservation rules should operate," he added.