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Cite as: [2011] Env LR 32, [2011] EWCA Civ 928

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		Neutral Citation Number: [2011] EWCA Civ 928
		Case No: A2/2010/2841

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARDIFF DISTRICT REGISTRY
HIS HONOUR JUDGE JARMAN QC
OCF90274

Royal Courts of Justice
Strand, London, WC2A 2LL

29/07/2011

B e f o r e :

LORD JUSTICE PILL
LORD JUSTICE JACKSON
and
LORD JUSTICE GROSS
____________________

Between:

	ALYSON AUSTIN and others	Appellants
	- and -
	MILLER ARGENT (SOUTH WALES) LIMITED	Respondent

____________________

Mr. David Hart QC and Mr. Jeremy Hyam (instructed by Richard Buxton Environmental & Public Law) for the Appellant
Mr. Geraint Webb and Mr James Pereira (instructed by DLA Piper LLP) for the Respondent
Hearing date : 28 July 2011
____________________

HTML VERSION OF JUDGMENT
____________________

Lord Justice Jackson:

This judgment is in seven parts, namely;

Part 1 Introduction

Part 2 The Facts

Part 3 The Appeal to the Court of Appeal

Part 4 Did the judge err in refusing to make a Group Litigation Order?

Part 5 Did the judge err in ordering the claimants to pay the defendant's costs of the application?

Part 6 The Claimants' Application for a Protective Costs Order

Part 7 Conclusion

Part 1. Introduction

In this appeal the prospective claimants in a proposed group action appeal against an order dismissing their application under section III of Part 19 of the Civil Procedure Rules ("CPR") for a Group Litigation Order ("GLO").

The dispute between the parties concerns open cast mining operations which, it is alleged, caused nuisance by dust and noise to local residents. Those affected by the nuisance intend to claim damages and an injunction.

Because the subject matter of the appeal is situated in Wales and the application for a "GLO" was made in Cardiff, the Court of Appeal sat in Cardiff to hear the appeal.

At the time of the hearing below there were five hundred and sixteen prospective claimants. Their number has now increased to five hundred and forty nine. I shall refer to these individuals as "claimants", although none has yet issued a claim form.

The claimants' solicitors are Richard Buxton Environmental and Public Law, to which I shall refer as "Richard Buxton". The defendant's solicitors are DLA Piper UK LLP, to which I shall refer as "DLA".

The claimants' counsel both in this court and at first instance is Mr. David Hart QC. The defendant's counsel in this court are Mr. Geraint Webb and Mr. James Pereira. Mr. Webb deals with GLO issues. Mr. Pereira appeared below but Mr. Webb did not.

In this judgment I shall use the following abbreviations:

"Aarhus Convention" means the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters made at Aarhus, Denmark on 25 June 1998.

"ATE" means "after the event".

"BTE" means "before the event".

"CFA" means "conditional fee agreement".

"EIA Directive" means Council Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment.

"PCO" means "Protective Costs Order".

The Aarhus Convention requires that there be proper consultation in respect of all administrative decisions which will affect the environment. It came into force in October 2001. It was ratified by the UK and the European Community in 2005. Articles 9.3 and 9.4 of the Aarhus Convention provide as follows:

"9.3 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.

9.4 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."

A PCO is a remedy fashioned by judges over the last decade to protect claimants in certain public law proceedings against excessive liability for adverse costs. The guidelines which cover the grant of PCOs were set out by the Court of Appeal in R (on the application of Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192; [2005] 1 WLR 2600 at paragraphs 74-76. These guidelines have been the subject of subsequent glosses in a number of decisions of this court.

The Civil Procedure Rule Committee has not yet made any rules to regulate the making and effect of PCOs. There is no judicial decision on the question whether a PCO can be granted in private nuisance litigation concerning alleged environmental damage.

After these introductory remarks, I must now turn to the facts.

Part 2. The Facts

At Ffos-y-fran on the eastern side of Merthyr Tydfil there is an area of derelict land, which has historically been used for coal and slag tipping. On 11 April 2005 a committee of the Welsh Assembly granted planning permission for a reclamation project at Ffos-y-fran, known as the "the Ffos-y-fran Land Reclamation Scheme". This project involves the removal of coal from the site by open cast mining, followed by the restoration of the land to urban common land and agricultural land, as appropriate.

The defendant is carrying out the Ffos-y-fran Land Reclamation Scheme. The defendant will use part of the profits from the sale of coal to fund the restoration of the land. The defendant commenced work on site in June 2007. Under the terms of the planning permission the defendant must cease coal extraction within fifteen years and three months from commencement of development. The defendant must complete final restoration of the land within seventeen years, six months from commencement of development.

The claimants are residents of Merthyr Tydfil, who live in the vicinity of the Ffos-y-fran Land Reclamation Scheme. Some claimants are householders, being either owners or tenants of their homes. Others are children of householders. The claimants contend that the dust and noise generated by the coal extraction and associated works at Ffos-y-fran constitute a private nuisance.

On 15 June 2010 Richard Buxton issued an application for a GLO in order to regulate the claimants' prospective litigation. Mr. Paul Stookes, a partner in Richard Buxton, made a witness statement in support of the application. In paragraph six Mr. Stookes stated:

"I am instructed that all claimant experience either dust or noise pollution arising from the opencast 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 opencast. 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."

Mr. Stookes then set out the history of earlier, unsuccessful public law challenges to the Ffos-y-fran Land Reclamation Scheme, in which his firm had acted for the objectors. Draft Particulars of Claim were annexed to Mr. Stookes' witness statement. The draft Particulars of Claim assert that the claimants' homes are between thirty six metres and one kilometre from the site. After setting out the hours of work the draft Particulars of Claim continue:

"5. The Claimants' case is that since November 2007, the Defendant has carried on its opencast operations (including mining, coal haulage, blasting, waste removal, stripping, formation etc.) in such a manner as to cause or permit both noise and dust to be emitted from the site in such a way as to cause detriment to the use and enjoyment of the Claimants' homes.

6. The same amounts to a material interference with the Claimants' use and enjoyment of their homes and is, and has been a nuisance. To the extent it is necessary to rely on it, it is also an interference with Claimants' Article 8 right to private and family life.

Particulars of Noise and Dust Nuisance and Other Air Pollution

7. The Defendant has carried out its 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 gardens, 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 s.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."

On the basis of these alleged facts the claimants claim damages and an injunction to prevent continuance of the nuisance.

At a case management conference on 28 July 2010 Judge Milwyn Jarman QC gave directions for the defendant to serve evidence and the parties to identify issues. He directed that the GLO application be re-listed on a date after 10 September 2010.

On 26 August 2010 Mr. Paul Stone, a partner of DLA, filed a witness statement in opposition to the claimants' application. In this statement Mr. Stone set out the background history of the Ffos-y-fran Land Reclamation Scheme and the various public law challenges in some detail. He described the measures taken by the defendant to control dust and noise during the works and denied that the coal extraction and associated works gave rise to any actionable nuisance. Mr. Stone set out two objections to the grant of a GLO. First, there was insufficient information about the proposed claims. Secondly, it was not clear that the claimants had funding in place, either to cover their own costs or to meet any adverse costs order.

The date fixed for the adjourned hearing of the claimants' application for a GLO was 20 September 2010. On this occasion judge Jarman further adjourned the hearing of the claimants' application to a date after 1 November. He directed that the claimants should file evidence in respect of:

"(1) the Claimants' means of funding;

(2) whether there are arguably common issues of fact between the proposed Claimants in respect of: (a) noise, and (b) dust; and

(3) whether the number of logged complaints to the Defendant is indicative of the actual problems at the site."

On 27 September 2010 Mr. Stookes filed a second witness statement on behalf of the claimants. In relation to funding Mr. Stookes stated that his firm was acting on a CFA, which would mean that the claimants would have no liability to pay his firm's costs. In relation to adverse costs, Mr. Stookes stated that he was seeking ATE insurance in respect of the proposed litigation.

Turning to the substantive claim, Mr. Stookes maintained that he had provided sufficient details. He had informed DLA where the individual claimants resided. Mr. Stookes produced a letter in which the defendant admitted having caused a nuisance on an occasion in October 2007. He produced some car cleaning vouchers provided by the defendant to local residents. Mr. Stookes also produced a noise assessment report prepared by the Merthyr Tydfil Council's Public Health Department, dated 7 July 2008. In paragraph 14 Mr. Stookes stated:

"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 three distinct neighbourhoods of Dowlais, Bradley Gardens and Mountain Hare."

His Honour Judge Jarman QC heard the application for a GLO at Cardiff on 11 November 2010. He rejected the application on two grounds. First, there was insufficient information about the claims. Secondly, it was uncertain whether the claimants could fund the litigation. The judge also ordered the claimants to pay the defendant's costs of the GLO application on the standard basis.

The claimants were aggrieved by the order of Judge Jarman. Accordingly they have appealed to the Court of Appeal.

Part 3. The Appeal to the Court of Appeal

By a notice of appeal dated 7 December 2010 the claimants appealed against Judge Jarman's order dated 11 November 2010. Shortly after serving the notice of appeal the claimants' solicitors ascertained that no ATE insurance was obtainable for this proposed litigation. Meanwhile the defendant's solicitors hastened to prepare their bill of costs. In December 2010 DLA served a bill of costs for opposing the GLO application in the sum of £257,150.

The claimants' notice of appeal as supplemented by their skeleton arguments essentially contained three grounds of appeal, which I would summarise as follows:

i) The judge should not have been deflected from granting a GLO by funding considerations. Although (as now known) ATE insurance cannot be obtained, the claimants will be entitled to a PCO, since their claim falls within article 9 of the Aarhus Convention.

ii) Since the judge did not consider that the claimants had furnished sufficient information about their proposed claims, he ought to have adjourned the application, in order that the claimants could provide further information.

iii) The judge ought not to have ordered the claimants to pay the defendant's costs of the GLO application assessed on the standard basis. Such an order would expose the claimants to a liability for prohibitive expense, contrary to article 9.4 of the Aarhus Convention.

I should add that the claimants' grounds of appeal contain reference to the EIA Directive. It is now common ground, however, that that directive does not apply to this case.

In the course of the hearing of this appeal it became clear that the second ground of appeal (adopting my numbering set out above) gave rise to difficulties. Accordingly, the claimants' counsel amended his notice of appeal to add an additional ground of appeal as follows:

"The judge erred in law in failing to grant a GLO at the hearing on 11 November 2010. He should have dealt with issues of funding and additional information in respect of the effect on specific individuals in the course of GLO directions."

I shall refer to this as the fourth ground of appeal, although different numbering has been adopted in the claimants' draft.

In addition, there is before this court an application by the claimants for a PCO, in order to limit their liability for adverse costs in respect of the present appeal. We are asked to deal with this application at the same time as the substantive appeal.

Thus, in the appeal as finally constituted, there are three separate questions for us to address. First, did the judge err in refusing to make a GLO? Secondly, did the judge err in ordering the claimants to pay the defendant's costs of the application? Thirdly, should this court make a PCO in respect of the present appeal? I must deal first with the question of the Group Litigation Order.

Part 4. Did the Judge err in refusing to make a Group Litigation Order?

Section III of Part 19 of the CPR provides a procedure for managing group litigation. Rule 19.11 provides:

"(1) The court may make a GLO where there are or are likely to be a number of claims giving rise to the GLO issues. (Practice Direction 19B provides the procedure for applying for a GLO.)

(2) A GLO must –

(a) contain directions about the establishment of a register (the 'group register') on which the claims managed under the GLO will be entered;

(b) specify the GLO issues which will identify the claims to be managed as a group under the GLO; and

(c) specify the court (the 'management court') which will manage the claims on the group register."

Practice direction 19B supplements section III of Part 19 of the CPR. Paragraph 3.2 of practice direction 19B provides:

"The following information should be included in the application notice or in written evidence filed in support of the application:

(1) a summary of the nature of the litigation;

(2) the number and nature of claims already issued;

(3) the number of parties likely to be involved;

(4) the common issues of fact or law (the 'GLO issues') that are likely to arise in the litigation; and

(5) whether there are any matters that distinguish smaller groups of claims within the wider group."

The procedure contained in section III of part 19 of the CPR enables group litigation to be managed by the parties and by the courts in an efficient and cost effective manner. Nevertheless the decision whether to make a GLO is a matter for the court's discretion. The making of a GLO commits both the parties and the court to the allocation of substantial resources to the conduct of group litigation. The court will not make a GLO before it is clear that there is a sufficient number of claimants, who seriously intend to proceed and whose claims raise common or related issues of fact and law.

In the present case, as at 11 November 2010 it was not clear that there was a sufficient number of claimants who seriously intended to proceed. ATE insurance had not been obtained. At paragraph five of his judgment, the judge recorded the following submission of Mr. Hart:

"He has been frank enough to say that if the hoped for after-the-event insurance policies are not forthcoming then it may be that that the claimants will seek a cost capping order or alternatively it may be that certain claimants would not be wiling to proceed with the litigation."

Rules 44.18 – 44.20, which relate to costs capping, would be of little assistance to the claimants in the present litigation. Although Mr. Hart has argued before this court that there is jurisdiction to make a PCO in private nuisance litigation, he made no such submission to Judge Jarman. Nor did he refer to the provisions of the Aarhus Convention.

On the basis of the evidence and submissions before Judge Jarman, it was far from clear that any claimant would be in a position to proceed. Only two claimants had BTE insurance. The limit of that BTE cover was £50,000. Furthermore far more than two claimants are necessary to constitute a viable group action.

As at 11 November 2010 no claimant had issued a claim form and that remains the position today. No witness statement from any individual claimant was available and that remains the position today. The information required by paragraph 3.2(5) of Practice Direction 19B was not before the court and that remains the position today. The judge's conclusions on the basis of the material before him were as follows:

"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 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 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 make 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 for that comes from rule 19 itself which refers to the court making, or having a discretion to make, a GLO where there are, or 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 the 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."

As indicated in Part 3 above, Mr. Hart attacks this decision on two alternative bases. First, the judge should have adjourned the claimants' application for a GLO, rather than dismissed it. Secondly, if the judge was not adjourning the application, he ought to have granted it.

In my view, the proposition that the judge should have adjourned the application for a GLO is untenable. The judge had already adjourned this application more than once before the hearing on 11 November 2010. No one asked him during the hearing to adjourn the matter yet again. The judge cannot sensibly be criticised failing to adjourn the hearing of the claimants' application for a GLO on his own initiative. Indeed immediately after Judge Jarman gave judgment, when the question of adjournment was belatedly canvassed, the claimants' counsel indicated that he was not pursuing any application for the matter to be adjourned.

I turn now to Mr. Hart's second line of attack, namely that the judge should have proceeded immediately to issue a GLO. Although more promising than Mr. Hart's first line of attack, this too must fail.

The judge was making a discretionary decision in relation to case management. On the basis of the evidence and submissions before him, the view which the judge took of the prospective litigation, as set out in paragraphs 14 and 15 of his judgment, was a perfectly reasonable one. In those circumstances the judge was exercising his discretion reasonably when he refused to make a GLO. There is no basis upon which this court should, or indeed could interfere with that exercise of discretion. The judge cannot be criticised for failing to conclude that the claimants would have the benefit of a PCO, when no such submission had been made on the claimants' behalf.

Accordingly, my answer to the question posed in Part 4 of this judgment is "no". I must now turn to the judge's order for costs.

Part 5. Did the Judge err in Ordering the Claimants to Pay the Defendant's Costs of the Application?

The claimants contend their claim for private nuisance is litigation which falls within article 9.3 of the Aarhus Convention. Accordingly article 9.4 requires that the litigation should not be "prohibitively expensive". The defendant's bill of costs for opposing the GLO application amounts to £257,150. The claimants maintain that that sum constitutes prohibitive expense. Accordingly the claimants, being of modest means, contend that their costs liability should be limited to nil, alternatively a very low sum. The claimants therefore invite this court to set aside the costs order made on 11 November and to remit the matter to the judge for reconsideration.

The defendant opposes this application on four principal grounds. First, the defendant says that this action does not fall within the Aarhus Convention. Secondly, and in any event, the court does not have jurisdiction to make a PCO in these proceedings. Thirdly, even if the judge did have jurisdiction to make a PCO, he was not invited to do so at the hearing on 11 November 2010. It is now too late to raise this point. Fourthly, and finally, the defendant contends that the costs which the judge has ordered the claimants to pay do not amount to prohibitive expense.

Before I plunge into the issues, it may be helpful to set out figures. This court more than once in recent months has expressed concern about the level of costs which the defendant is seeking. In response to these concerns Mr. Pereira has prepared a breakdown of the figures, which he handed up on the second day of the appeal. Mr. Pereira accepts that VAT is not recoverable by the defendant against the claimants. He also accepts that a thirty per cent reduction is likely on detailed assessment. Accordingly, the total costs liability is reduced to £153,646 on Mr. Pereira's figures. Although no GLO has been made, the defendant proposes to treat each claimant as liable for no more than his pro rata share of costs and will not seek any order for costs against those claimants who are children. On this basis, the costs liability of each adult claimant pursuant to the judge's costs order is calculated to be £361.52. Mr. Pereira also states that the defendant will not seek to enforce its costs order against any claimant who does not proceed further with an application for a GLO or commence any claim against the defendant in respect of the same or similar subject matter.

The court finds this breakdown of the figures to be helpful. For the avoidance of doubt, the court expects that the costs liability of any individual claimant will be assessed in a sum no higher than £361.52. Furthermore, and again for the avoidance of doubt, the defendant is bound by the assurances which it has given to this court through counsel (a) not to enforce the costs order against any child and (b) not to enforce the costs order against any adult claimant, unless that claimant proceeds further with an application for a GLO or commences any claim against the defendant in respect of the same or similar subject matter.

In relation to the applicability of the Aarhus Convention and the power of the court to limit the claimants' costs liability, argument has centred upon the decision of this court in Morgan and Baker v Hinton Organics (Wessex) Ltd [2009] EWCA Civ 107. In Morgan the claimants alleged that smells from a composting site near their homes constituted a private nuisance. Following the discharge of an interim injunction, Judge Seymour ordered the claimants to pay the costs of the injunction proceedings. The claimants appealed against the costs order on the ground that this imposed upon them prohibitive expense, contrary to article 9.4 of the Aarhus Convention. Giving the judgment of the court, Carnwath LJ summarised the status of the Aarhus Convention in English law as follows:

"For the purposes of domestic law, the Convention has the status of an international treaty, not directly incorporated. Thus its provisions cannot be directly applied by domestic courts, but may be taken into account in resolving ambiguities in legislation intended to give it effect (see Halsbury's Laws Vol 44(1) Statutes para 1439)). Ratification by the European Community itself gives the European Commission the right to ensure that Member States comply with the Aarhus obligations in areas within Community competence (see Commission v France Case C-293/03 (2004) ECR I-09325 paras 25-31. Furthermore provisions of the Convention have been reproduced in two EC environmental Directives, dealing respectively with Environmental Assessment and Integrated Pollution Control (neither applicable in the present case)."

I should add that in the present case, as in Morgan, neither of the two EC environmental directives are applicable.

After reviewing the relevant authorities, the court in Morgan was content to assume, without deciding, that the Aarhus Convention was capable of applying to private nuisance proceedings, when the nuisance alleged not only affected the claimants but also the environment of a whole locality: see paragraphs 42-44 of the judgment.

Despite assuming that the Aarhus Convention was applicable, the court dismissed the claimants' appeal. The grounds upon which the court did so are set out as follows in paragraphs 49 and 50 of Carnwath LJ's judgment:

"49. It is unnecessary, in our view, to consider the application of the Convention in further detail, because there is in our view an insuperable objection to the claimant's case in this respect. That is that the point was not mentioned before the judge. This is admitted by Mr Hart. His answer is that the requirement to comply with the Convention is "an obligation to the Court", which should have been considered by the judge of his own motion; or alternatively, it is a requirement on this court in reviewing the judge's decision in order to avoid contravention of the Convention.

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 have wished to give evidence of its own position."