ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Mr Justice Elias (President), Mr B Beynon and Sir Alastair Graham
ON APPEAL FROM THE READING EMPLOYMENT TRIBUNAL
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE MOSES
| NADIA EWEIDA
|- and -
|BRITISH AIRWAYS PLC
Ingrid Simler Q.C. (instructed by Baker & McKenzie LLP) for the Respondent
Hearing date: 24 September 2009
Crown Copyright ©
Lord Justice Lloyd:
The appellant's claim
Protective costs orders - the principles
"We would therefore restate the governing principles in these terms:
1. A protective costs order may be made at any stage of the proceedings, on such conditions as the court thinks fit, provided that the court is satisfied that:
i) The issues raised are of general public importance;
ii) The public interest requires that those issues should be resolved;
iii) The applicant has no private interest in the outcome of the case;
iv) Having regard to the financial resources of the applicant and the respondent(s) and to the amount of costs that are likely to be involved it is fair and just to make the order;
v) If the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in so doing.
2. If those acting for the applicant are doing so pro bono this will be likely to enhance the merits of the application for a PCO.
3. It is for the court, in its discretion, to decide whether it is fair and just to make the order in the light of the considerations set out above."
"39. On a strict view, it could be said, Goodson remains binding authority in this court as to the application of the private interest requirement. It has not been expressly overruled in this court. However, it is impossible in our view to ignore the criticisms of this narrow approach referred to above, and their implicit endorsement by this court in the last two cases [Compton and Buglife]. Although they were directly concerned with other aspects of the Corner House guidelines, the "flexible" approach which they approved seems to us intended to be of general application. Their specific adoption of Lloyd Jones J's treatment of the private interest element makes it impossible in our view to regard that element of the guidelines as an exception to their general approach."
"In the meantime, in our view, the "flexible" basis proposed by Waller LJ, and approved in Buglife should be applied to all aspects of the Corner House guidelines."
"This rule reflects a basic rule of English civil procedure, namely that, as Lord Halsbury LC said in Civil Service Co-operative Society v. General Steam Navigation Co  2 KB 756, a successful litigant has a prima facie right to his costs. In cases like Ritter v Godfrey  2 KB 47 the Court of Appeal has laid down more detailed principles limiting the circumstances in which a successful party can be deprived of his costs or ordered to pay the costs of the other party. Order 62, rule 3(3) is a formidable obstacle to any pre-emptive costs order as between adverse parties in ordinary litigation. It is difficult to imagine a case falling within the general principle in which it would be possible for a court properly to exercise its discretion in advance of the substantive decision. So in Wallersteiner v Moir (No 2)  QB 373, 403 Buckley LJ rejected an application for an order protecting the plaintiff, Mr Moir, from being ordered to pay the costs of the defendant, Dr Wallersteiner, irrespective of the outcome of the case:
'I have never known a court to make any order as to costs fettering a later exercise of the court's discretion in respect of costs to be incurred after the date of the order. I cannot think of any circumstances in which such an order would be justified.'"
"The present appeal is concerned not with the incidence of costs in private law civil or family litigation or with statutory (or other) appeals, but with the incidence of costs in a judicial review application at first instance. Over the last 20 years there has been a growing feeling in some quarters, both in this country and in common law countries abroad which have adopted the "costs follow the event" regime, that access to justice is sometimes unjustly impeded if there is slavish adherence to the normal private law costs regime described by Buckley LJ in Wallersteiner v Moir (No 2) and by Hoffmann LJ in McDonald v Horn."
"Nonetheless, the parties before me are agreed that the nature of the instant proceedings is essentially "quasi-public", in the sense that they go to matters of status, they are essentially directed to the elucidation of public law and they involve proceedings which might appropriately be brought in the Administrative Court but for the statutory provision contained in section 55 of the 1986 Act; the parties have therefore been in broad agreement that I should approach the application before me on the basis of the principles set out in the Corner House case."
"As to (1)(iii), I find the requirement that the applicant should have "no private interest in the outcome" a somewhat elusive concept to apply in any case in which the applicant, either in private or public law proceedings is pursuing a personal remedy, albeit his or her purpose is essentially representative of a number of persons with a similar interest. In such a case, it is difficult to see why, if a PCO is otherwise appropriate, the existence of the applicant's private or personal interest should disqualify him or her from the benefit of such an order. I consider that, the nature and extent of the "private interest" and its weight or importance in the overall context should be treated as a flexible element in the court's consideration of the question whether it is fair and just to make the order. Were I to be persuaded that the remaining criteria are satisfied, I would not regard requirement 1(iii) as fatal to this application."
"However, taking the remaining criteria into account, I do not consider that this is a case where it is appropriate to make the PCO sought, although, for reasons I shall state later, I do consider it appropriate to impose a limit upon the amount the Lord Chancellor's costs."
"(1) A costs capping order is an order limiting the amount of future costs (including disbursements) which a party may recover pursuant to an order for costs subsequently made.
(2) In this rule, 'future costs' means costs incurred in respect of work done after the date of the costs capping order but excluding the amount of any additional liability.
(3) This rule does not apply to protective costs orders.
(4) A costs capping order may be in respect of –
(a) the whole litigation; or
(b) any issues which are ordered to be tried separately.
(5) The court may at any stage of proceedings make a costs capping order against all or any of the parties, if –
(a) it is in the interests of justice to do so;
(b) there is a substantial risk that without such an order costs will be disproportionately incurred; and
(c) it is not satisfied that the risk in sub-paragraph (b) can be adequately controlled by –
(i) case management directions or orders made under Part 3; and
(ii) detailed assessment of costs.
(6) In considering whether to exercise its discretion under this rule, the court will consider all the circumstances of the case, including –
(a) whether there is a substantial imbalance between the financial position of the parties;
(b) whether the costs of determining the amount of the cap are likely to be proportionate to the overall costs of the litigation;
(c) the stage which the proceedings have reached; and
(d) the costs which have been incurred to date and the future costs.
(7) A costs capping order, once made, will limit the costs recoverable by the party subject to the order unless a party successfully applies to vary the order. No such variation will be made unless –
(a) there has been a material and substantial change of circumstances since the date when the order was made; or
(b) there is some other compelling reason why a variation should be made."
Sedley LJ's orders
Lord Justice Moses
Lord Justice Maurice Kay