Neutral Citation Number:  EWHC 4168 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
London WC2A 2LL
Tuesday, 18 September 2012
B e f o r e:
MRS JUSTICE LANG
THE QUEEN ON THE APPLICATION OF SAVE BRITAIN'S HERITAGE
SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENT
SEFTON METROPOLITAN BOROUGH COUNCIL
WIRRAL METROPOLITAN BOROUGH COUNCIL
LIVERPOOL CITY COUNCIL
BLACKBURN AND DARWEN BOROUGH COUNCIL
PENDLE BOROUGH COUNCIL
BURNLEY BOROUGH COUNCIL
STOKE ON TRENT CITY COUNCIL
HYNDBURN BOROUGH COUNCIL
HULL CITY COUNCIL
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Richard Harwood (instructed by Richard Burton Solicitors) appeared on behalf of the Claimant
James Eadie QC and Iain Steel (instructed by the Treasury Solicitor) appeared on behalf of the Defendant
Mr M Wenban Smith (instructed by Cobbetts) appeared on behalf of the Interested Parties, Pendle BC and Burnley BC
Mr M Wenban Smith (instructed via Direct Access Scheme) appeared on behalf of Darwen and Blackburn BC
The other interested parties did not appear and were not represented
J U D G M E N T
1. MRS JUSTICE LANG: I have given careful consideration to the written and oral submissions. I consider that the claimant has established an arguable case that there has been a material error of law in the decision making process; indeed this is conceded. The Secretary of State does not wish to attempt to recover the sums already paid and so it is said, on his behalf, that there is no point in pursuing this claim.
2. Whilst recognising the force of this, and the difficulties involved in undoing what has already been done, I consider that the claimant is entitled to have its claim considered by the court in a full judicial review hearing, and I consider this would be in the public interest given the importance of the environmental issues. The court has discretion whether or not to grant relief, even where liability is established. I do not consider that there was a failure to act promptly in bringing the claim, therefore I grant permission and I would like to discuss directions with counsel.
3. MRS JUSTICE LANG: I have brought along the template that the court has for case management directions so that we have a document to work off. I only have three copies for perhaps Mr Harwood, Mr Eadie and Mr Wenban Smith. So looking at case management directions my view is that it would be in everyone's interest for there to be expedition. Any uncertainty about decisions involving public funding is undesirable and there has already been significant delay. So subject to your respective views I was thinking of making an order that it be heard in this coming term, towards the end, but I imagine that anything too close to Christmas would be unattractive. I had in mind say perhaps something listed no later than the week commencing 10 December. There is the week of the 10, the penultimate week of term, and then Monday 17 is the last week of term before Christmas. I want to maximise the amount of time for preparation, but on the other hand if you go into that last week of term the court will be chockablock with the usual pre Christmas rush and I do not know how many days you think this is going to take. I am little concerned about timing. Should I hear from you first on expedition and timing? Perhaps Mr Eadie first. I imagine Mr Harwood will be more than happy with expedition.
4. MR HARWOOD: More than happy with expedition and that sort of timescale. Given what needs to be done it then becomes a matter of compressing the particular timescale to make sure we fit in with that.
5. MRS JUSTICE LANG: Mr Eadie, what do you
6. MR EADIE QC: It is a matter entirely for you whether you are content to order expedition and allow this case, or what remains of it, to jump the queue ahead of the other Administrative Court business, which I know is pressing. I am not going to seek to dissuade you from that. The only thing we would urge is to allow us sufficient time at the beginning of the process to consider the development of the grant of permission. It may well be, given the events that have happened and the reconsideration which has occurred, the Secretary of State I make now promises will take the view he does not want to chuck more good money after bad in relation to this.
7. MRS JUSTICE LANG: I think that is a matter for you. The first bullet point under the case management directions sets out the standard 35 days. I would not abridge that. If there is to be any other sort of thinking about directions that can be done during that period. So if listing say that the week commencing 10 December is convenient, or
8. MR EADIE QC: I do not have my diary here. I do know that from a few days before for eight days I have a case that is running in relation to the transfer of prisoners in Afghanistan, and so I will not be able to do that date now. It may be that the Secretary of State, if a decision is taken to contest this, would want me to be involved, given I have been involved until now. I know my diary for that last bit of December is very difficult and it may be that in the circumstances there would still be expedition if my Lady ordered a slightly longer window, as it were, and we could then liaise, myself and my learned friend, about timing and about finding a date that would be convenient to both of us to be heard by say end of January next year. That would not be more than a month, or so, of additional spreading of time and may enable us to be present. Rather than having a "no later than" you have a hearing on a date.
9. MRS JUSTICE LANG: I hope I am not disclosing any secrets by saying that Listing Officers when they see a deadline date always list on and around the deadline date.
10. MR EADIE QC: Even if it went into January I know that would make my life easier as I know December is hideous. It seems a little harsh on the Secretary of State to deprive counsel of choice, unless it is absolutely necessary.
11. MRS JUSTICE LANG: You must be heavily in demand, Mr Eadie. I imagine sometimes the Government has to make judgments about how they best deploy you.
12. MR EADIE QC: They certainly do and that is undoubtedly right. The question is whether the court, given the urgency of this case, or the view about the urgency of the case, should force them to that election. I can pretty much predict, given this case is this case and Afghanistan is Afghanistan, which way they would jump were they to be put to that election. The real question for you is whether you would want to put them to that election. If you extended the window to the end of January I am pretty certain we can find a date. This case will not take more than a day, I do not imagine.
13. MRS JUSTICE LANG: That was the other consideration. Is that right? I thought two days would be safer.
14. MR EADIE QC: There are no live issues left. There are some. I do not want to go back on my lady's permission. You have identified some issues and I fully accept that. They are within a relatively narrow compass, which is a better way of putting that point. We are not fighting about the unlawfulness of the original decision any more.
15. MRS JUSTICE LANG: Is the court going to want to look at the position of individual local authorities in a way that obviously is going to take a little time? I think there is an issue also of concern to me, to be frank, that I do not really want a dozen local authorities separately represented, because it turns into a much bigger and longer process. I have wondered whether it would be reasonable to direct that interested parties should be limited to written representations.
16. MR EADIE QC: Either that or you limit them to, as it were, a single counsel or single legal team.
17. MRS JUSTICE LANG: Maybe both, so that they can put in their details of their individual situation in writing, but that all local authority interested parties who wish to be represented by one counsel, so that we do not have a dozen people here
18. MR EADIE QC: I am not seeking to dissuade you from that. I suspect, as I say, by the time the hearing comes around, particularly if they have put in their position in writing, we are not going to be spending a lot of time arguing about the individual position of individual authorities. It is tolerably clear that a percentage of them have spent or committed one can have an argument around the edges of what logically "committed" means. You can clarify the position in relation to some of them and others of them, but the fact of the matter is that you will end up with a percentage of the money that has been spent. That is probably clear. The real question is whether variations in that percentage are going to make any real difference to the court's decision on relief. I do not think we are going to spend that much time on the individual position of local authorities, I have to say.
19. MRS JUSTICE LANG: I will hear from Mr Harwood.
20. MR HARWOOD: My Lady, first of all, in terms of the timescale for expedition, we would really want this dealt with before Christmas. It is a matter that obviously is of concern to quite a number of people, both public authorities, ourselves and also residents in the areas, for these matters to be sorted out. It is unfortunate it has taken to this stage to get a decision on permission. So the whole context of course of the response from the Secretary of State has been a lot of money has been spent and there is no practical point. We are concerned that the Secretary of State's approach of just keeping a delay in the proceedings has an effect of seeking to strengthen their position, rather than actually resolving the important issues on the ground. My Lady's suggestion that they should be dealt with not later than the week commencing 10 December is the sensible course. In terms of my diary that week is good for me. A couple of weeks beforehand are quite busy, but that week we can do.
21. MRS JUSTICE LANG: What about Mr Eadie who has a clashing case?
22. MR HARWOOD: Of course there is always the problem of diaries and the question then of representation. This is a case where whilst from our perspective we are dealing with it on a conditional fee basis, my learned friend's side is not. Whilst the documentation is expanding with the responses from the authorities, it is not such a volume of material that the Secretary of State is not capable of dealing with that by choosing other counsel if they feel the need to do so. My main point is that it is important to get on with this case and it is one way which on its merit does require dealing with before the end of term.
23. MRS JUSTICE LANG: Parking that for a moment, what do you say about time estimate?
24. MR HARWOOD: I am little cautious about whether we could do it in one day. It does depend how the issues evolve. The points which may take time, if it proves to be of sufficient importance to get into them, are the legal issues on restitution and what has actually happened with the money, when it has been spent and so forth. There is quite a difference in approach between the Secretary of State saying that the majority has been spent or committed, and our analysis which is pointing towards less than half of it spent and very little which is capable of resisting a restitutionary remedy.
25. Once those issues have gone through there may be a difference between the parties in terms of what is capable of being recovered. At this stage it is not possible to say that we are not going to have to get into those documents, we may have to. In terms of the interested parties' positions, it seems to us it would be quite sensible if the interested parties were jointly represented both in terms of limiting the number of people making submissions to the court, but also simply in terms of case management. At the moment my solicitors have to correspond with the nine local authorities, who are interested parties, and the other four who have not formally acknowledged service, on just about everything. There is quite a considerable increase in costs in the process. A single representation from the interested parties would be of great assistance.
26. MRS JUSTICE LANG: I am not sure that is going to help your particular problem with service, because I imagine that the local authorities would use their in house solicitor and then share a counsel. The problem with that is that obviously they all need still to be served separately.
27. MR HARWOOD: As it stands at the moment two of the authorities, possibly three, are represented by Cobbetts Solicitors and the rest are using their in house solicitor. There may well be a mechanism to try and rationalise the representation on that side. That does depend on the interested parties.
28. MRS JUSTICE LANG: Mr Wenban Smith, do you want to say anything about what we are discussing as to representation of the local authorities?
29. MR WENBAN-SMITH: Only one brief point, which you mentioned: most local authorities use their in house legal teams because of the cost of seeking outside legal representation, and many of them are bound contractually internally to do so. Only in exceptional circumstances do they go outside their own legal services' teams for costs reasons. In this case, for instance, your Ladyship will have realised Blackburn have chosen not to instruct Cobbetts, but they have instructed me directly, whereas Pendle and Burnley are using Cobbetts. In my submission it would be unworkable to oblige local authorities to spend money on legal representation outside their teams.
30. MRS JUSTICE LANG: What is proposed is that, first of all, as a general proposition, interested parties be limited to written representations, but that the local authority interested parties may also jointly instruct one counsel to appear, if they wish, just to cover the possibility that the local authority might wish to be heard orally.
31. MR WENBAN-SMITH: I have no instructions on whether the local authorities I represent today will wish to take part further in these proceedings, particularly because the Secretary of State's indication, which we only learned of very recently, is that he does not intend to recoup the money, which takes away their practical concern.
32. MRS JUSTICE LANG: I think a time estimate of two days is the safe course and as regards the date I am willing, if it assists counsel, to fix a date today. I can rise in a moment to enable you to make the necessary telephone calls. If that is not what you want, or that is not feasible, then it will just have to be left for general listing, but would you like the opportunity to see if you can actually decide on a date in December or early January? Mr Eadie, does that help you at all?
33. MR EADIE QC: It does if that could be done.
34. MRS JUSTICE LANG: Shall I rise now to let you do that, because the date that is selected has a knock on effect on the other directions? We need to know that first.
35. MR HARWOOD: That is sensible.
36. MR EADIE QC: My lady, thank you for that time. I understand we can all do 28 and 29 January. That is a two day slot. I can do any time in the week of 4 February, but if you are keen to get it on 28/29 January is my window.
37. MRS JUSTICE LANG: You cannot do anything in December?
38. MR EADIE QC: I cannot. There is a succession of other things in my diary.
39. MR HARWOOD: My Lady, it seems that that is delaying matters too far. There is a need to get this case on. We can do, from our side, dates in the week of 10 December and the week of 17 December. We can do 10 and 11 December and 17 and 18 December. To put matters to the end of January, in a situation where authorities will have had the money for a year, is delaying matters too far. I appreciate the Secretary of State's position may change very soon, but we do need to get on with this case.
40. MRS JUSTICE LANG: I think that the difference between late December and January is so marginal. I agree that there has been delay, but that is just not going to make a difference, I do not think. Subject to your desire to have it on earlier, are you available on 28 and 29?
41. MR HARWOOD: Yes, we are available for 28 and 29 January.
42. MRS JUSTICE LANG: I will fix it for those days then. Who is going to draw up this order to send in to the associate?
43. MR HARWOOD: I can take carriage of that.
44. MRS JUSTICE LANG: Under then listing directions, which has its own separate heading, it will be listed for days on 28 and 29 January. The rest of that can be deleted. The case is not suitable for hearing by a Deputy.
45. Just going back then to case management directions, probably stick with the standard directions in the light of the hearing date: the "35 days from..." This template is what we are given to do paper applications. So I think that just in terms of calculating time it should run from today: 35 days of this order. Does anyone want to ask for any different timings to those? So is there anything about disclosure? It seems to me, looking at your skeleton, Mr Harwood, that has fallen away.
46. MR HARWOOD: The material we now seek is at paragraph 45 of my skeleton, because as you may appreciate things have moved on. That is the report in January which explains what the totality is, hopefully a benchmark, and then the correspondence about expenditure. What we would also need is given on the main letter to the actual ministerial decision and briefing that leads to that. Whether that material comes from disclosure, or is volunteered by the Secretary of State, is a matter of indifference, but if my learned friends are not able to say the material will be produced in evidence, perhaps it is easier to have an order that they disclose it.
47. MRS JUSTICE LANG: Are the items in paragraph 45 of Mr Harwood's skeleton controversial?
48. MR EADIE QC: They may be. I do not know. I will have to take some instructions. I have not come prepared to have an argument about disclosure today. In my submission it would not be appropriate to start making orders about disclosure now in advance of detailed grounds, which may set out different issues. Some of the documents may have disappeared into the background, or cease to be relevant.
49. MRS JUSTICE LANG: They were referred to in the summary grounds. Obviously there are very general obligations in relation to disclosure and judicial review, which your solicitors will be well aware of. Could they also just please consider the position in relation to the documents specified at paragraph 45 of the skeleton, and inform the claimant's solicitors whether they are willing to disclose those voluntarily?
50. MR EADIE QC: If they are going to be disclosed, they will be disclosed no doubt as part of the evidence due on the 35 day deadline anyway.
51. MRS JUSTICE LANG: If they are not, then the claimant can consider whether he wants to apply for an order. We just need to consider whether there should be a Protective Costs Order.
52. MR HARWOOD: That is the main outstanding issue. We say it is a matter of considerable public interest in terms of result dealing with the matter in Corner House terms. Whilst it does not directly involve environmental legislation, it has significant environmental impacts that bring us within the Aarhus Convention. In terms of the need for a Protective Costs Order, particularly with significant parties represented and the work involved with material, we are already at something like 700 pages, or so, most of which has come in the acknowledgment of service. I say we do need costs protection. We suggest a figure of £5,000, which is the same as a Protective Costs Order. We at present have ongoing litigation in respect of one aspect of the HMR Scheme, which is demolition in the sightings (?) in Sefton. They are very different environmental issues.
53. Bearing that in mind, and the need for SAVE not to bet the organisation on this sort of litigation, £5,000 capital liability is appropriate. In terms of any reciprocal cap we make, the point at paragraph 42 of my skeleton has of course the importance that parties in this litigation are able to be represented by experienced and specialist legal teams, so it is not a matter of simply relying on extremely low rates. We are acting on a conditional fee basis, but if there was a reciprocal cap the appropriate thing is either to cap the recovery at a normal rate, subject to assessment, or at a fixed figure. This is a case which is going to be at the upper end of the costs scale in terms of judicial review, simply because of the number of different parties we are dealing with and the factual circumstances which arise. It is a case that does put us out of the ordinary on judicial review proceedings. What I suggest at paragraph 42 is if there was to be a cap for a fixed figure, then £70,000 to £75,000 plus VAT is around the sort of level. That is a figure which would, we suspect, particularly for a two day case and the work involved so far, put us in at normal rates, or somewhat below that, for these sorts of proceedings.
54. MRS JUSTICE LANG: The point about cap recovery at normal rates means no uplift?
55. MR HARWOOD: No uplift. What is recovered is what is reasonable on assessment.
56. MRS JUSTICE LANG: I will hear Mr Eadie now.
57. MR EADIE QC: Our position is, as you see, set out at paragraph 36 of our summary grounds. We point out that my learned friend refers to the organisation on this litigation. According to his own evidence his latest bank account balances total £485,000, it being proposed that there should be a cap of £5,000. In my respectful submission an organisation with a sum of money in a bank account of that amount should not be subject to a PCO at all. If, however, you are convinced that a PCO is appropriate, a cap of considerably more than £5,000 would be appropriate. We are not dealing with an impecunious organisation. On the contrary, by the look of their bank account with £500,000 in it
58. MRS JUSTICE LANG: I think one has to look at an organisation's accounts to see. It is not just a question of what you have in your account at any one time. You need to see over a period of a year, or more, profit and losses
59. MR EADIE QC: Certainly. The information we have is in paragraph 14 of the affidavit in the witness statement that has been put in of Susan Ring (?) at page 34 in bundle 1. That is the nearest thing anyone has to the account. You will see from that that we are not dealing with a situation where they have £450 in the bank account all committed, as it were, that has been built up over time. You will see last year their expenditure was £250,000 and they received income in the last year of £500,000. They are building up a fund as they go, as it were. Some £100,000 of that is legacy funding. It appears that still leaves a very significant balance which is no doubt fed into accumulated prior year balances, which have generated genuine money: free money, as it were, in the bank account of a very significant amount. Precisely what portion of that money is committed, or would be needed, is not stated by the claimant as a matter of choice. They have chosen not to give more details than appear there. The reality is that they have £500,000 in the bank account accumulated over the years. It is available there to spend if they regard this as an important project. They are not the sort of organisation, in my respectful submission, that should be coming to court and saying, "The taxpayer should be required to take a risk on this".
60. We do submit that that level of money, having regard to additional information in paragraph 14, puts them outside the sphere of PCOs, in effect, imposing risk on the taxpayer. As I say, if you are persuaded a PCO is appropriate in principle then £5,000, given that level of funding, is plainly inappropriately low, we submit. We would suggest a figure of something closer to £50,000 might be appropriate. In terms of caps, a reciprocal cap should be imposed and we would respectfully submit it should be at roughly the same sort of
61. MR HARWOOD: Picking up those points previously, what is explained in Miss Ring's witness statement is of course the same as considerable other sources to be incurring expenditure on. It is an organisation which, as they may be aware, is campaigning for buildings up and down the length of the country, and publishes a Buildings at Risk Register. It is not an organisation which is able to bet its operations on litigation. That is why a number of cases saves (inaudible) the benefit of Protective Costs Orders. For Protective Costs Orders to be frankly worth having they need to be at a realistic level in terms of the degree of protection, and £50,000 is frankly not an order worth having because the costs expenditure, in terms of say the proportion of SAVE's operations at risk would be very substantial in those circumstances. One does not know what the Treasury costs would work out at in these proceedings and whether they would even reach £50,000. We simply do not know.
62. In terms of any costs cap, my learned friend does not actually address the point. It is not about having a level of amount of costs going potentially between the parties, but it is about enabling access to justice and enabling issues to be resolved, which involve, on one hand, limiting the costs exposure of those who bring public interest litigation, and, on the other hand, ensuring that public interest litigation can be brought by sufficiently experienced lawyers who are not simply doing it freely. There is inevitably quite a disparity in the two, as my learned friend's submissions do not recognise that.
63. My Lady we suggest the appropriate Protective Costs Order is £5,000 liability and £70,000 to 75,000 plus VAT costs cap, or simply normal fees. I am reminded, quite rightly, that the approach of the Court of Appeal in Ghana, which was an environmental case, was to discourage any requirement of an applicant's PCO to be producing a great deal of material about the funding, both in terms of the chilling effect of disclosure material, but also avoiding a danger of getting into satellite litigation with large amounts of material being disclosed, complaints being produced and the like, which simply racks up costs and discourages resolution of the important issues in this case.
64. MRS JUSTICE LANG: I consider that the criteria for a Protective Costs Order are met. This is a claim brought by a charity in the public interest and on issues which have an environmental impact. I do not consider the fact that the charity has a substantial balance in its bank account should deprive them of the protection of the Protective Costs Order. This is a very small organisation with only four staff. It is dependent on donations and subscriptions and it has a number of other environmental and planning projects, which it pursues at any one time. It would not be prudent for it to risk its future on the basis of one claim. Therefore, I consider the application is correctly made and I would grant a Protective Costs Order in the following terms: the cap on any costs order against the claimant should be £5,000 plus VAT, and the cap on any costs order against the defendant should be £50,000 plus VAT. I think it is appropriate to have a reciprocal cap. This is a higher figure than is sometimes awarded and that is to reflect the additional work that has been imposed upon the claimant because of the large number of local authority interested parties, as has been described in the witness statements of Susan Ring served on the court.
65. MRS JUSTICE LANG: Is there anything else that I need to deal with? (No response)