Neutral Citation Number:  EWCA Civ 363
Case No: A2/2010/2841
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
HHJ Milwyn Jarman QC sitting in the High Court
at Cardiff on 11 November 2010
Royal Courts of Justice
Strand, London, WC2A 2LL
LORD JUSTICE PITCHFORD
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AUSTIN & OTHERS Appellant
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MILLER ARGENT (SOUTH WALES) Respondent
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David Hart QC (instructed by Richard Buxton Environmental & Public Law) for the Appellant
Charles Gibson QC (instructed by DLA Piper UK - Solicitors) for the Respondent
Hearing date: 29th March 2011
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Lord Justice Pitchford :
1. On Tuesday 29 March 2011 I heard the claimants' renewed oral application for permission to appeal. The claimants were represented by Mr David Hart QC and the defendant by Mr Charles Gibson QC. Both counsel appeared before the judge below. The hearing took place on notice to the defendant who elected to appear and make submissions. At the conclusion of the hearing I reserved my reasons but made the following order:
1. Time within which to issue the notice of appeal extended;
2. Permission to appeal granted upon both grounds;
3. Within 7 days of the renewed permission hearing the defendant to provide the claimants with an estimate of the defendant's costs of the appeal, estimated at one day;
4. Within 21 days of the hearing the claimants to serve a witness statement making such disclosure of the means of the claimants as they are advised should be made in support of a protective costs order for the appeal to the full court. Within 28 days of the hearing the defendant to file any further evidence in response;
5. Within 35 days of the hearing the claimant to serve a skeleton argument in support of their application for a protective costs order in the appeal;
6. Within 42 days of the hearing the defendant to serve a skeleton argument in response to the application for a protective costs order in the appeal;
7. The application by the claimants for a protective costs order and any further directions by either side will be considered, at least in the first instance, in writing by a single Lord Justice of Appeal;
8. The costs of the permission to appeal hearing shall be the costs in the appeal.
These are my reasons.
2. This is a renewed application for permission to appeal an order made by HH Judge Milwyn Jarman QC sitting in the High Court at Cardiff on 11 November 2010 when he dismissed the claimant's application for a Group Litigation Order ("GLO") and ordered the claimants to pay the defendant's costs of the application on the standard basis.
3. The claimants all live in Merthyr Tydfil. Many of them are householders with a proprietary interest in their homes; others are children of the householders. The claims they wish to advance are in private nuisance and concern the activities of the defendant on a land reclamation site situated to the north east of Merthyr Tydfil in Mid-Glamorgan and some 367 hectares in area. I disclosed to the parties at the commencement of the hearing that I live within 2-3 miles south as the crow flies from the reclamation site but was not affected by it. I felt no embarrassment and the parties were content that I should proceed to hear the application. The South Wales valleys were formerly populated by coalmines and iron works and in consequence suffered the environmental pollution of coal and slag heaps. In the years since the Aberfan disaster in 1966 the landscape has been in the process of steady recovery. In more recent years that recovery has been gathering pace. The reclamation site is an area of historic coal and slag tipping which has for generations scarred the landscape of Merthyr Tydfil. The reclamation in which the defendant is engaged involves the recovery of old coal deposits from the tips the income from which will in part be used to restore the site to moorland. The project will take at least 15 years to complete.
4. The claimants live in the vicinity of the reclamation works. They claim that they have from time to time suffered the effects of dust and noise to a degree which amounts to a private nuisance. There have been five previous unsuccessful challenges to the reclamation by means of judicial review proceedings. It is not necessary for me to consider the details of those claims for reasons which will become apparent. It is enough to record the defendant's belief that some of those who wish to become claimants in the GLO were supporters of these previous proceedings.
5. There are now some 519 prospective claimants largely gathered by a process of consultation between their solicitors and the local community. On 15 June 2010 the solicitors acting for the claimants issued an application for a GLO under CPR 19.11. At the time the application was issued there were some 190 proposed claimants. The application was supported by a witness statement of the same date from Paul Stookes, a partner in the firm of Richard Buxton, Environmental and Public Law of Cambridge which was acting for the claimants. Exhibited to the witness statement were schedules 1A and 1B to the draft proposed GLO in which the names and addresses of the claimants were listed. They appear at pages 19-31 of Appeal Bundle 2 ("AB2").
6. The information provided in support of the GLO was extremely limited. I read from paragraph 6 of Mr Stookes' witness statement (AB2, page 7):
"6. I am instructed that all claimants experience either dust or noise pollution arising from the open cast operations. The majority experience both. I am instructed that the extent of noise and dust impact varies due to weather conditions and other factors such as distance from the open cast. However almost all claimants instruct me that both dust and noise impacts on their quality of life (subject to a few exceptional and specific instances). Dust and noise has caused pollution since the start of the operations in 2007. This is explained further below."
The only further information provided in support of the general assertion of nuisance is a reference to the defendant's normal working hours and a statement made at paragraph 14 of the witness statement (AB2, page 10):
"14. I am instructed that noise and dust nuisance has been experienced since the open cast operations began in 2007. As [sic] recorded in Merthyr Council's, summary incident records exhibited at Exhibit PAS3, pages 1-2."
The incident records (AB2, page 40) exhibited purported to show entries of 23 complaints of dust emanating from the site and 56 complaints of noise produced by site activity recorded by Merthyr Tydfil Borough Council between November 2007 and March 2009. No details were provided of the names or addresses of those complainants. The complaints concerned dust pollution on 12 separate days during that period and noise pollution on 47 days. That represents a complaint concerning either dust or noise once every 10 days or so, but several complaints duplicate others made on the same or following days. The impression is that complaints were made to the local authority spasmodically.
7. The draft proposed group Particulars of Claim (AB2, page 36) contained no additional details. The particulars in paragraph 7 asserted:
"7. The defendant has carried out his operations above with sufficient regularity, frequency, duration and at a level of intensity to cause a nuisance to the claimants, in particular by way of:
(i) Noise emitted from the site by its various operations including mining, blasting, coal haulage, waste removal, stripping and replacement of soils, and the formation and removal of baffle mounds;
(ii) Dust to be emitted from aforesaid mining operations such as to fall on the homes, in the garden, on cars and on other property of the claimants; and
(iii) Fumes, odours, and other air pollution to be emitted as a result of its operations, in the gardens, on cars and on other property of the claimants.
8. While certain dust suppression and noise mitigation measures are required by the planning permission and section 106 agreement, such measures, to the extent that they have been employed, have been ineffective to prevent both noise and dust nuisance to the claimants' homes on a regular basis."
The claimants seek "an injunction to restrain the defendant by its servants or agents or otherwise howsoever from continuing the nuisance" and damages.
8. At a case management conference conducted by telephone on 28 July the application was resisted by the defendant as premature and the application was adjourned to 20 September 2010. At the hearing of that date it was again adjourned to 11 November 2010. On 20 September 2010 the claimant was given leave to file further evidence dealing with (1) the claimants' means of funding the action, (2) identifying common issues of fact and (3) the connection, if any, between the schedule of complaints and the putative claims.
9. In his second witness statement of 27 September 2010 (AB2, page 88/4) Mr Stookes asserted that the defendant had admitted that noise or dust had affected residents in the past. In this regard he exhibited a letter concerning an incident on 23-24 October 2007. He relied upon a summary noise assessment conducted by Merthyr Tydfil Borough Council on 7 July 2008. At paragraph 14 he said:
"14. In my view, the evidence before the court is sufficient to establish that it is at least arguable that dust and noise nuisance is being caused. Defendant's own correspondence relating to noise and dust refers to at least 3 distinct neighbourhoods of Dowlais, Bradley Gardens, and Mountain Hare."
Of the complaints logged by the local authority Mr Stookes said only (AB2, page 88/6, paragraphs 15-22) that complaints were unlikely to be representative of actual conditions during the relevant period. As to funding, Mr Stookes confirmed that he was instructed by each claimant under a conditional fee agreement. As to the ability of the claimants to meet a successful defendant's costs order he referred to a letter of 10 August 2010 to the defendant's solicitors in which it was said (AB2, page 88/3, paragraph 6):
"... insurance is either already in place or will be in place to cover the potential liability to the defendant for its costs. We will advise you as necessary of any policy and further cover as and when appropriate."
At paragraph 8 Mr Stookes continued that the claimants had sought after-the- event ("ATE") insurance cover. The insurance provider had been contacted on 24 September 2010 and on the day the witness statement was made. He continued at paragraph 9:
"9. In the event that insurance is not in place to cover all of the risk of adverse cost, then my firm will apply to the court for an order that the exposure to the defendant's costs be limited to a level to ensure that the proceedings are not prohibitively expensive. The proposed claimants do not seek any formal costs order at this stage, however they reserve the right to apply for such an order."
To date no cost-capping order has been sought. Elias LJ when refusing permission to appeal also refused an application for a protective costs order and suggested that the application should await the outcome of the renewed application hearing.
10. The claimants sought to justify the application for a GLO by identifying the claimants, their addresses and their proximity to the site. It was said that each of the claimants lived in one of five zones situated to the west and north of the site. The prevailing weather in the locality is from the west. It might be thought that the level of dust and noise emanating from activity at the site would vary according to weather conditions and that, for the most part, weather conditions would be favourable to the residents. Nothing is said in the generic particulars of claim about the frequency, duration or degree of exposure in any one of the zones to which reference was made in the claimants' skeleton argument before the judge. Indeed the zones themselves are not referred to in the generic particulars of claim.
11. At paragraph 13 of his skeleton argument Mr Hart acknowledged the economic precariousness of the individual claims as follows (AB1, page 31, paragraph 13):
"13. In particular they are claims which individually may be uneconomic to bring but brought as a group can be managed in a way that is proportionate in use of court time and costs. The whole principle of Access to Justice was to allow such claims to be brought rather than raise inappropriate thresholds or procedural hurdles (as the defendant appears to be suggesting is appropriate) to stifle such claims."
12. Mr Paul Stone of DLA Piper UK LLP submitted a witness statement dated 26 August 2010 on behalf of the defendant. Mr Stone expressed the defendant's reasons for opposing the GLO. In bare summary he asserted that there was insufficient information disclosed to the court as to the existence of a significant number of claimants who were making viable claims of nuisance, viable in the sense that they had a reasonable prospect of success. There was a complete absence of supporting information which might give the court and the defendant an idea of the strength of the claims. Secondly, the means of the claimants to meet any adverse costs orders was unclear. There was a real risk that unmeritorious claims were being tagged on to group litigation. If that was happening a GLO could only be prejudicial to the defendants who, it was possible, would be unable to enforce costs orders against them. It was acknowledged by Mr Gibson before the judge that the claimants were proposing the preparation of a schedule of information from each of the prospective claimants as a feature of case management of the group litigation. In his submission, however, the claimants were putting the cart before the horse. Before the court could have a sensible impression whether a GLO was appropriate the information leading to an assessment whether there was a prospect of success of proving actionable nuisance was unavailable. The application was accordingly premature.
13. In his judgment dismissing the application Judge Jarman QC noted the defendant's acceptance in principle that claims of this kind were amenable to a GLO. As to the defendant's costs the judge noted Mr Hart's confidence that an insurance policy would be in place within a matter of weeks. In the event that no policy was secured the claimants would seek "a cost capping order". Alternatively, (and, from the defendant's point of view, importantly) it was possible that some of the claimants would drop out of the litigation.
14. Then, at paragraph 9 of his judgment, the judge said (AB1, page 24):
"9. In relation to viability, there is sufficient information to allow and justify a conclusion that there are likely to be a number of claims arising from dust and noise as a result of these operations to make the granting of a GLO a sensible step to take. However that is not the end of the matter. Mr Hart, despite the appearance from the skeleton arguments filed on behalf of each party suggesting that there was a difference of principle on the issue as to the extent to which the court should take into account funding issues in deciding whether to make a GLO, accepted today that it is a factor which could be taken into account. What he submitted, however, was that this is not a factor which, of its own, would justify the refusal of such an order.
At paragraphs 14 and 15 the judge concluded (AB1, page 25-26):
"14. I accept the submission that if this were a case where there were plainly a number of cases with a very real chance of success in establishing a nuisance against the defendant then uncertainties as to the precise nature of funding might not be sufficient justification not to grant a GLO. However, in my judgment, the uncertainties as to funding coupled with the, perhaps understandably, sparse information available as to the effect on each of the potential claimants of the alleged nuisance is such that, with reluctance and some hesitation, and only after anxious consideration, I have come to the conclusion that the application is, at this stage, premature. I made clear that this does not rule out another application if and when, as is hoped, and of course I take Mr Hart's submissions on that basis, the funding is in place but for the moment I am not satisfied that position has been reached. In my judgment, support from that comes from rule 19 itself which refers to the court making, or having a discretion to make, a GLO where there are, or are likely to be, a number of claims giving rise to the GLO issue.
15. I accept, as Mr Hart has submitted, that there are a number of common issues of fact and law which may arise if claims were indeed commenced; such as effect of the operations since 2007, how much noise and dust is generated and how local residents are affected. There are also common issues of law as to whether those effects amount to nuisance, and the extent to which the granting of planning permission has a bearing on those claims. However, it does not seem to me that the stage has yet been reached that it can be said that there are likely to be a number of claims giving rise to those issues and, therefore, for those reasons, I dismiss this application." [emphasis added]
15. It follows that the judge did not regard the claimant's funding problems as conclusive, but that uncertainty, coupled with the absence of sufficient information with which the court could assess the prima facie strength of the claims, and the issues common to those claims, caused the judge to decline to make the order.
16. There is attached to the claimant's (Alyson Austin) application for a protective costs order of the permission to appeal hearing a transcript of the proceedings which followed the judge's judgment. Mr Hart noted the emphasis which the judge had placed upon the absence of clarity as the availability of the claimants' ATE defence costs funding policy. If confirmation was received during the next few weeks the application would be renewed. Mr Hart invited the judge, in those circumstances, to reconsider his dismissal of the application and instead substitute an adjournment for a period of, say, 28 days in order that funding problems could be resolved. The judge rejected Mr Hart's further application. He informed him that he had considered the matter during the course of argument and had concluded that the application had been made five months earlier on 5 June 2010 and still the requisite information was not available. In argument before me Mr Gibson rightly pointed out that the claimants could, as the defendant had suggested, have applied for a further adjournment, but they had declined to do so. Mr Hart responded to the judge that in that case he had nothing to say in resisting in principle the defendant's application for costs of the application. Neither the defendant nor the claimants had served a statement of costs for summary assessment. The judge therefore ordered detailed assessment in the absence of agreement.
17. The claimants sought leave to appeal the judge's order on 2 grounds which I paraphrase:
(1) The judge dismissed the application on the grounds of funding future defendant's costs orders. This was not an adequate reason. This was an application to which the Aarhus Convention 1998 applied. The claimant should not be shut out of a group action simply by reason of the uncertainty of funding. The judge should have adjourned the application to await the result of the application for insurance funding or an application for a protective costs order;
(2) The judge should not have made a costs order against the claimants before the proceedings had commenced. Costs should have been reserved.
18. Three events have since occurred which in the claimants' submission have affected the merits of their appeal. First, in R (Edwards & Another) v Environment Agency & Others (No 2)  UK SC57;  1 WLR 79, the Supreme Court has made an important ruling concerning the application of the Aarhus Convention to the detailed assessment of costs. Second, the defendant has submitted a summary bill of costs to the claimants' solicitors in the sum of £257,150.01. Three, insurers have declined ATE insurance for the claimants and the claimants are informed that no such insurance is now or is likely to become available in the market.
19. The Aarhus Convention was ratified by the European Community and the UK in February 2005. Its purpose was to record the agreement of the signatories to a series of measures designed to promote the proper management of the environment. Save where the European Community has issued a specific Directive incorporating the terms of the convention they cannot be applied in domestic courts but may, as an international treaty to which the UK is a signatory, only be taken into account when resolving any ambiguity in legislation intended to give it effect or (depending upon the context) to inform the exercise of judicial discretion. No domestic legislation has been enacted which affects the current cases and no Directive has been issued by the European Community so as to apply Convention terms to a claim in private nuisance made by a private individual against a private contractor. Article 9 of the Convention concerns access by interested parties to relevant information and to review of administrative decisions affecting the environment. Relevant for present purposes are Article 9(3) and (4) which read as follows:
"(3) In addition and without prejudice to the review procedures referred to in paragraphs 1 and 2 above each party shall ensure that, where they meet the criteria, if any, laid down in its national law, members of the public have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relating to the environment.
(4) In addition and without prejudice to paragraph 1 above the procedures referred to in paragraphs 1, 2 and 3 above shall provide adequate and effective remedies, including injunctive relief as appropriate, and be fair, equitable, timely and not prohibitively expensive. Decisions under this article shall be given or recorded in writing. Decisions of courts, and whenever possible of other bodies, shall be publicly accessible."
20. On the face of it the words of Article 9(3) and (4) are wide enough to embrace proceedings in private nuisance. The Court of Appeal was required to consider just such an argument in Morgan v Hinton Organics (Wessex) Ltd  EWCA Civ 107;  2 P & C R 4. At paragraph 44, Carnwath LJ, delivering the judgment of the court said:
"44. These arguments raise potentially important and difficult issues which may need to be decided at the European level. For the present we are content to proceed on the basis that the Convention is capable of applying to private nuisance proceedings such as these. However, in the absence of a Directive specifically relating to this type of action, there is no directly applicable rule of community law. The United Kingdom may be vulnerable to action by the Commission to enforce the Community's own obligations as a party to the treaty. However, from the point of view of a domestic judge, it seems to us (as the DefRA statement suggests) that the principles of the convention are at the most something to be taken into account in resolving ambiguities or exercising discretions (along with other discretionary factors including fairness to the defendant)."
At paragraph 47 of its judgment, the court drew together its conclusions. Included among them the court observed that in cases where EC Directives had not incorporated Aarhus principles:
"(iii) ...The rules of the CPR relating to the award of costs remain effective, including the ordinary "loser pays" rule and the principles governing the court's discretion to depart from it. The principles of the Convention are at most a matter to which the court may have regard in exercising its discretion."
Further, the court observed:
"(vi) Apart from the issues of costs, the Convention requires remedies to be "adequate and effective" and "fair, equitable, timely". The variety and lack of coherence of jurisdictional roots currently available to potential litigants may arguably be seen as additional obstacles in the way of achieving these objectives."
21. Mr Hart's argument, therefore, is that Judge Jarman QC should have exercised his discretion whether to grant a GLO with Article 9(4) in mind. The objective should have been to secure as far as reasonable that the claimants should not be prevented from pursuing claims through a GLO which, individually, might be prohibitively expensive because they were economically unviable. Mr Hart, his junior and instructing solicitors appeared for Mr Morgan in the appeal. That being so it is remarkable that no mention of the Aarhus principles was made before Judge Jarman QC. Mr Hart was unable satisfactorily to explain that failure to me. In Morgan the court declined to consider the application of Aarhus on appeal. At paragraph 50 the court said:
"50. We are unable to accept that argument. Mr Hart could not point to any legal principle which would enable us to treat a pure treaty obligation, even one adopted by the European Community, as converted into a rule of law directly binding on the English court. As we have said, it is at most a matter potentially relevant to the exercise of the judge's discretion. If the claimants wished him to take it into account, they needed not only to make the submission, but also to provide the factual basis to enable him to judge whether the effect of his order would indeed be "prohibitive". The defendant would also no doubt wish to give evidence of its own position."
22. Mr Hart argues that this position has changed since the recent decision of the Grand Chamber of the European Court of Justice in Lesoochranarske zoskupenievlk v ‘Slovakia' in case no C-240/09 (the Slovakian bear case) on 8 March 2011. There, the issue was whether Article 9(3) applied directly to give an environmental interest group in Slovakia locus standi in an administrative review. At paragraph 52 the Court said:
"... Article 9(3) (of the Aarhus Convention) does not have direct effect in EU law. It is, however, for the referring court to interpret, to the fullest extent possible, the procedural rules relating to the conditions to be met in order to bring administrative or judicial proceedings in accordance with the objectives of Article 9 (3) of that Convention and the objective of effective judicial protection of the rights conferred by EU law, in order to enable an environmental protection organisation, such as the zoskupenie, to challenge before a court the decision taken following administrative proceedings liable to be contrary to EU environmental law."
This decision appears at first sight to do no more than emphasise the need for domestic courts when exercising discretions such as those considered by Judge Jarman QC to give effect as far as domestic provisions allowed to the objectives of the Convention. At the time when Judge Jarman QC was invited to exercise that discretion his attention was drawn to no considerations beyond those which appeared in Mr Stookes' witness statements and Mr Hart's skeleton argument.
23. It does, however, appear to me that quite apart from Convention issues there is an argument which is deserving of attention by the full court, namely whether it was appropriate to dismiss the application rather than put the claimants on terms as to the further provision of information necessary to make the consequential case management orders under a GLO. While I am informed that the principles under which the discretion to make a GLO are continually under discussion in the courts below there is no authoritative pronouncement by the Court of Appeal as to the significance of the issues raised by the defendant in the present case to the merits of the order which was sought. I am very conscious of the fact that this was a case management decision with which the Court of Appeal will not lightly interfere. However, this appeal appears to raise important points of principle of access to justice. Since Mr Hart argues that the application of Aarhus Convention principles has, since the recent decision of the European Court, become a matter of law, I do not propose at the stage of a permission hearing to shut out such an argument before the full court. Whether the full court will entertain the argument is another matter.
24. I turn, secondly, to the order for costs. Since I have granted permission on the first ground I need strictly say no more. There is, however, a discrete argument as to why, if ground 1 were to fail, the order for costs has turned out to be excessive. Judge Jarman QC awarded the defendant his costs of the hearing on 28 July 2010, 20 September 2010 and 11 November 2010. In the absence of a statement of the defendant's costs it was only on 2 December 2010 that DLA Piper dropped the bombshell that they would be seeking to justify on detailed assessment a bill for over £250,000.
25. On 15 December 2010 the Supreme Court published its decision in R (Edwards & Anr) v Environment Agency & Others (No 2). The claimant had applied for judicial review of a decision to issue a permit for the operation of a cement works in Rugby. The claim was dismissed in the High Court and Court of Appeal. In the Court of Appeal the claimant's liability for the defendant's costs had been capped at £2,000. On being granted leave to appeal to the House of Lords, the claimant sought a capping order relying on Article 10a Council Directive 85/337/EEC and Article 15a Council Directive 96/61/EC implementing the requirement, made in Article 9(4) of the Aarhus Convention, that members of the public should be able to challenge environmental decisions in proceedings that were not "prohibitively expensive". The House of Lords ordered that the claimant should pay the costs of the appeal. The claimant sought to raise the same issue before the House of Lords costs officers who were carrying out the detailed assessment of the defendant's bill of costs. The costs officers decided to disallow any costs which they found to be prohibitively expensive. The Supreme Court, on a review of their earlier costs decision under Rule 53 (1) Supreme Court Rules 2009, held that the cost officers had no such discretion. If it existed then it must be exercised by the tribunal making the order for costs. The Supreme Court stayed the order for costs pending a ruling by the Court of Justice of the European Union as to what was the correct test for determining whether the costs of proceedings were "prohibitively expensive".
26. At the hearing before HH Judge Milwyn Jarman QC the claimants did not attempt to resist an order for costs once the judge had ruled against the invitation to consider an adjournment. In the light of the Supreme Court's decision in Edwards the claimants cannot now, as a matter of law, challenge the bill on Aarhus principles on the basis that the claimant should not be required to pay 100% of the defendant's costs on detailed assessment. Mr Hart wishes to argue that the objectives of the Aarhus Convention (even if, unlike Edwards, not directly applicable to an assessment of costs) constitute a consideration relevant to the exercise of discretion and, for that reason, the costs order should be remitted to the judge for reconsideration.
27. I accept that the claimants have arguable grounds for seeking a reconsideration of the costs award whether they succeed in achieving the reversal of the judge's dismissal of the application for a GLO or not.