New Zealand: Reform of judicial review receives Royal Assent in the UK

After prolonged political wrangling, reforms to judicial review in the UK were enacted mid-February. The changes are claimed by the British Government to be aimed at reducing the burden of vexatious judicial review applications on the public service.

Judicial review involves the court reviewing the decisions and actions of public bodies and those exercising public functions.

The Criminal Justice and Courts Act 2015 (the Act) passed on 15 February 2015. The UK government justified the changes in the Act on the argument that judicial review proceedings had become a promotional tool for countless left-wing campaigners and served only as a legal delaying tactic against legitimate public decisions. The amendments sought to make it more difficult to bring a claim and introduce new mechanisms to determine who should pay the costs of the proceedings.

Although the changes were modified considerably during the parliamentary process, they still impose significant restrictions.

Benefit to applicant must be proven

The new Act requires the Court, before accepting a judicial review, to consider whether the outcome for the applicant would have been different if the alleged defect in the decision-making process had not occurred. If it is highly likely that the outcome would not have been substantially different then the Court must reject the judicial review application unless there are reasons of exceptional public interest.

Prior to the Act, the benefit to the applicant was an issue that the Court could consider, but was not mandatory.

The change means that the applicant must show in all cases that it has a real interest in the decision being challenged. The purpose is to avoid the costs of judicial review proceedings when the alleged unlawfulness makes no real difference to the applicant.

Opponents argued that judicial review is not only concerned with the narrow interests of the individual claimant, but also the wider public interest in improving public decision-making. This is certainly true, and the change could have an undesirable side-effect, depending on the way the exceptional public interest test is applied.

Disclosure of how the case is financed

The Act introduces two new requirements concerning the financing of judicial review. First, applicants must disclose information on the financing of their judicial review claims (above a certain, yet to be defined, level). The information must include information on the source, nature and extent of financial resources available or likely to be available, to meet potential liabilities if the claim is lost. The source of funding must include any third parties who provide funding.

Second, if a judicial review claim is lost, the Court must consider awarding costs against any third person or organisation providing financial support to the applicant.

The claimed rationale behind these changes is the fairer sharing of the costs of litigation. The UK government was worried about claimants who otherwise could not afford to pay costs being funded by interest groups or other similar third parties in order to ensure that a case gets to court. If the claimant lost, the third parties, who had not actually joined the case, would not bear any liability for costs. As the claimant, in such cases, was usually impecunious, the result was that no costs awards were made. The government claimed that this was unfair, as it meant that the costs were instead falling on the public purse.

Even if the UK government's rationales are correct, however, the changes will capture parties who have funded litigation pure of motive, for example, a pro bono volunteer lawyer or a sympathetic family member.

Changes for Interveners

The Act establishes a presumption that third party interveners will be unable to recover their costs, even if successful. The Act has also made interveners liable, in certain circumstances, for costs incurred by other parties to the proceedings as a result of the intervention (often the public body defendant).

Interveners are usually parties who are not directly affected, but join a case to represent particular issues. Interveners are often charitable not-for-profit organisations, NGOs or other single issue groups who are interested in the issues being considered in a judicial review case and will seek permission from the court to file evidence or make representations.

A likely consequence, and an intended effect, of this change is to discourage interveners from joining judicial review proceedings in the UK. This is unfortunate, as these types of intervener can provide useful contributions to the courts' consideration of a particular legal problem but the UK government wanted to prevent interveners from using judicial review as a political platform.

Protective cost orders

The Act also alters the common law position on protective cost orders (PCO) (referred to as "cost capping orders" in the Act), which remove or limit a party's liability to pay another party's cost in judicial review proceedings. PCOs provide certainty as to costs for judicial review applicants, who otherwise may not apply for judicial review due to the potential cost. The Act has limited the scope for PCOs by allowing a Court to make a PCO only if:

  • Permission for judicial review has already been granted,
  • The proceedings are in the public interest;
  • In the absence of the order, the applicant would withdraw the judicial review application; and
  • It would be reasonable for the application to do so.

Similar changes needed in New Zealand?

A question that may come up is whether similar reforms are needed in New Zealand. The recent high-profile judicial review decisions involving parents challenging disciplinary decisions made by their children's school has stirred public debate around the appropriate use of judicial review.

That case, however, is quite different from the kinds of cases that led to the UK government wanting to reform judicial review processes. Even if the UK government's reasons for making the changes are accepted, it does not appear that judicial review has been used to oppose government action in a similar way in New Zealand.

The only recent case that comes close is the New Zealand Maori Council's review of the Government's decision to sell 49% of the shares in Mighty River Power. Although the NZMC lost in both the High Court and the Supreme Court, it successfully won recognition that the proposed sale of shares was reviewable for consistency with Treaty principles. This point was recognised as so important by the Supreme Court that it did not even award costs against NZMC. In no way could it be seen as a vexatious case

The case is also quite different from the UK situations in that NZMC was not an intervener, but the principal party, and the Courts were able to hear the case quickly, avoiding major delay to the Government's share programme.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Nick Crang
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