UK: Protective Costs And The Scottish Courts

Last Updated: 29 January 2010
Article by Murray Shaw

The issue of court expenses is a topical one. Lord Gill made reference to the costs of litigation in his recent report (Click here (http://tinyurl.com/y995eut) to view this report) and Lord Justice Jackson has just come out with a far reaching report in England.

The question of expenses can be a particularly difficult one in the context of planning cases where any challenge to the grant of a planning permission by a third party requires a judicial review application before the Court of Session, while equally challenges brought under the Town & Country Planning (Scotland) Act 1997 involve Court of Session proceedings either to the Inner House or depending upon the willingness of parties to the Outer House. The cost of proceedings before the Court of Session can be significant and may well act as a dis-incentive to bringing a challenge. That may be a particular issue in respect of cases which touch upon the "public interest".

It is interesting to note that in the recent challenge made against the "Trump" permission Senior Counsel for the Petitioner advanced arguments which to some extent appear to suggest that at least in part she was acting in the public interest.

The English courts concluded some time ago that they had jurisdiction to make a protective order in relation to the question of costs in "public interest cases". The most recent significant authority is the case of R (Corner House Research) v The Secretary of State for Trade and Industry [2005] 1W.L.R. 2,600 – a Court of Appeal decision.

The issue came before the Scottish Courts in late 2005 where Lord Glennie in the case of McArthur v The Lord Advocate (9 December 2005) decided that the Scottish Courts had jurisdiction to make such an order though he declined to do so in the circumstances of that case. It is perhaps of some significance that Lord Glennie before becoming a judge was a QC both in England and Scotland. In making his judgement he observed that the way in which costs are dealt with in the English Courts are very different from that in the Scottish Courts and that great care would need to be taken in simply applying the principles and procedures from England in Scotland. Nonetheless Lord Glennie came to the view that there was an inherent power in the Scottish Courts to make a protective order, even although in that case some of the arguments were dealt with somewhat "on the hoof" as Counsel for the Lord Advocate put it. That may in part be why the application failed through the principle was acknowledged.

On 20 January 2010 Lady Dorrian however has made such an order in a planning case. The Petitioner, Marco McGinty was seeking judicial review against the Scottish Government, the Judicial Review Petition relating to the designation by Scottish Ministers of a new power station and trans-shipment hub at Hunterston as a national development in the context of the National Planning Framework – the National Planning Framework in the present form being a requirement of the new planning legislation.

Mr McGinty has been refused legal aid. He had limited means. The Judicial Review Petition was being supported by donated funds but the funds available were likely to be exhausted after the hearing before Lady Dorrian. In the event that Mr McGinty's Petition was unsuccessful the award of expenses in favour of the Scottish Ministers had been estimated to be in the region of £90,000 or so with the Petitioner's own expenses being likely to be in the region of £80,000 or so. The argument for Mr McGinty was that if some form of order was not made the Petitioner would discontinue the proceedings and would be acting reasonably in doing so.

Scottish Ministers appear to have accepted as a matter of principle that the court did have jurisdiction to make an order and did not dispute a number of the criteria referred to on behalf of Mr McGinty, those criteria coming out of the Corner House Research case referred to above. In particular they acknowledged that the present case was of sufficient importance to justify such an order, that the issues raised were of genuine public importance and that the public interest required that the issues be resolved.

The remaining issues appeared to be whether or not Mr McGinty had any private interest in the outcome of the case, whether it was just and equitable having regard to all the circumstances including his financial resources that an order should be made and whether if an order was made an order should equally be made capping the amount of expenses which he as Petitioner might recover if successful.

Lady Dorrian accepted that these criteria were in fact satisfied. It should be noted that Senior Counsel for Scottish Ministers effectively left it to the court to decide whether or not on the information before the court, the court could be satisfied about the position.

In England where a protective costs order has been made in favour of an applicant the court in general terms appears to have been of the view that a "reverse" order should be made so that the Defender or Respondent should equally know what their liability might be, albeit the two limits should not necessarily be the same – that appears to depend upon all the circumstances of the case.

Lady Dorrian decided that the Petitioner should not be excused any liability but capped the liability at the sum of £30,000. Equally she specified that if the Petitioner, Mr McGinty, was successful what he would be entitled to recover would be limited to the costs of a solicitor and one Senior Counsel without Junior. Lady Dorrian continued the case to allow the exact form of the order to be determined.

It will be interesting to see to what extent further applications of this sort come before the Scottish Courts. There may be particular circumstances which mitigate against the making of such an order. For example, not all cases involving challenge to a public body simply involve that public body. – a third party who may be a private citizen or organisation may be brought in (if for example interim orders are sought). The availability of legal aid is clearly equally a consideration and different issues may arise if one party is legally aided and the other is not. The prospects for such an order being made may well be enhanced if a Petitioner in the position of Mr McGinty has reached some arrangement with his legal team involving abated or restricted fees or fees only payable in the event of success. Such arrangements are not always easy to make. There will be costs in any event in making such an application to the court for a protective costs order, even if it is not opposed.

The prospect however that such an order may be made clearly may be of significance in the pursuit of what might be termed "public interest" type cases.

There may be further changes to the relevant procedures in the procedures typically used in these types of case because Lord Gill has recommended that leave to bring a judicial review petition shall be mandatory.

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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