England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
SITTING IN CARDIFF

		16 September 2010

Mr Justice Wyn Williams:

Introduction

1. The Claimant is a private limited company. It was incorporated in or about August 2008. Its Memorandum of Association describes its objects in the following way:

"To promote for the benefit of the public the conservation, protection, and improvement of the physical and natural environment of the Gwendraeth Valley, Camarthenshire, including 20 SSSIs, SACs, SLPs, Ramsar sites.

To Promote for the benefit of the public the natural beauty of the landscape, clean air and low pollution levels in the Gwendraeth Valley, Carmarthenshire."

2. The Claimant came into existence as a response to a proposal to build a biomass power station at a site known, locally, as Coedbach Washeries – a site which is situated at the mouth of the Gwendraeth Valley. The aims and objects of the Claimant are driven by a small number of individuals. They are Robin Cammish, Ron Howells, David Gravell, Peter Protheroe and Pauline Bowers. There are 26 paid up members.
3. During the course of 2008 members of the Claimant discovered that there was another proposal to build a biomass power station in South Wales. It was proposed that such a power station should be located at the Kings Dock in Swansea. Mr Robin Cammish, in particular, liaised with a number of residents who were opposed to the prospect of a power station at the Kings Dock and the Claimant offered its assistance in opposing any proposal for a power station at the Dock.
4. In due course applications for planning permission were made to the relevant local authorities for the construction of power stations at the Coedbach Washeries and the Kings Dock. Following consideration by the local planning authority each application was refused. As I understand it the Claimant registered strenuous and detailed objections to the planning applications prior to their refusal.
5. The applicants for planning permission have appealed against the refusal of their plans. The appeals are by way of local public inquiry. The hearing of the appeal in respect of the proposal at Kings Dock has begun but it is adjourned part heard. The hearing of the appeal in respect of the proposal at Coedbach Washeries has yet to start.
6. On 26 March 2010 the Defendant granted consent under section 36 Electricity Act 1989 to the First Interested Party for a biomass fuelled power station at Avonmouth Docks, Bristol. He also directed that planning permission be deemed to be for the development under section 90(2) of the Town and Country Planning Act 1990. Neither the Claimant nor anyone else objected to the applications for consent in respect of the site at Avonmouth Docks. The Claimant played no part in any of the processes which led to the grant of the consent and the associated direction that planning permission be deemed to be granted.
7. On 24 June 2010 the Claimant instituted these proceedings. In the proceedings it seeks an order quashing the consent granted under section 36 of the 1989 Act and the associated deemed planning consent in respect of the Avonmouth site (as well as other and alternative relief). In its claim form the Claimant invited this court to grant a protective costs order in its favour. On 19 July 2010 the Defendant filed its Acknowledgement of Service together with summary grounds for resisting the claim. On 20 July 2010 the First Interested Party filed an Acknowledgement of Service and summary grounds of opposition. Both the Defendant and First Interested Party resisted the grant of permission to apply for judicial review and resisted the grand of a protective costs order.
8. On 26 July 2010 Beatson J made a detailed order with accompanying observations. The learned Judge refused the application for a protective costs order and he ordered that the application for permission should be listed for a hearing with the substantive application to follow immediately if permission was granted. That "rolled up" hearing has been listed before me on 17 September 2010. Beatson J refused the application for a protective costs order because he took the view that the Claimant had furnished insufficient information about its resources and the consequences for the proceedings if no protective costs order was made. Although the learned Judge does not say so expressly on the face of his order I have no doubt that in reaching his conclusion he had very much in mind the judgment of the Court of Appeal in R (Corner House Research) v Secretary of Trade and Industry [2005] 1WLR 2600.
9. On 29 July 2010 the Court of Appeal gave judgment in the case of R (Garner) v Elmbridge Borough Council & Others [2010] EWCA Civ 1006. In the light of that decision the Claimant made a further application to this court for a protective costs order. Its application was issued on 19 August 2010. This application, like its predecessor, is opposed by the Defendant and the First Interested Party.

The law which is applicable to my decision

10. There is no dispute but that the Defendant's decision to grant planning permission to the First Interested Party for a power station at Avonmouth is a decision to which Directive 85/377 EEC (as amended) applies. It is also common ground that the Directive has a direct effect in domestic law. Article 10a of the Directive is in the following terms:

"Member States shall ensure that, in accordance with the relevant national legal system, members of the public concerned:

a. having a sufficient interest, or alternatively,

b. maintaining the impairment of a right, where administrative procedural law of a Member State requires this as a precondition,

have access to a review procedure before a court of law or another independent and impartial body established by law to challenge the substantive or procedural legality of decisions, acts or omissions subject to the public participation provisions of this Directive.

Member States shall determine at what stage the decisions, acts or omissions may be challenged.

What constitutes a sufficient interest and impairment of a right shall be determined by the Member States, consistently with the objective of giving the public concerned wide access to justice. To this end, the interest of any non-governmental organisation meeting the requirements referred to in Article 1(2), shall be deemed sufficient for the purpose of subparagraph (a) of this Article. Such organisations shall also be deemed to have rights capable of being impaired for the purpose of subparagraph (b) of this Article.

The provisions of this Article shall not exclude the possibility of a preliminary review procedure before an administrative authority and shall not affect the requirement of exhaustion of administrative review procedures prior to recourse to judicial review procedures, where such a requirement exists under national law.

Any such procedure shall be fair, equitable, timely and not prohibitively expensive.

In order to further the effectiveness of the provision of this article, Member States shall ensure that practical information is made available to the public on access to administrative and judicial review procedures."

Article 1 specifies that;

"'public' means:

one or more natural or legal persons and, in accordance with national legislation or practice, their associations, organisations or groups;"

The Article defines 'public concerned' as

"the public affected or likely to be affected by, or having an interest in, the environmental decision-making procedures referred to in Article 2(2); for the purposes of this definition, non-governmental organisations promoting environmental protection and meeting any requirements under national law shall be deemed to have an interest."

11. The United Kingdom is a signatory to the Aarhus Convention. This Convention deals with access to information, public participation in decision-making and access to justice in environmental matters. For the purposes of the Convention the word "public" and the phrase "the public concerned" are defined in exactly the same way as that word and phrase are defined in Directive 85/337 EEC (see Article 2 of the Convention). Article 9 is concerned with "Access to Justice"; paragraphs 2 to 5 of that Article contain provisions which are very similar to the provisions of Article 10a of the Directive. It seems clear that the Directive, as amended, is intended to give effect in community law to the provisions of the Convention. However, since the Directive takes effect as part of our domestic law it is sufficient, in the main, hereafter to concentrate upon its provisions.
12. It is clear that the Directive does not proceed on the basis that every member of the public should have "wide access to justice" in appropriate environmental cases. The persons who are to enjoy such access are "members of the public concerned" who are persons having a "sufficient interest" or "maintaining the impairment of a right". Whether or not a person has a sufficient interest is to be determined in accordance with the domestic law of each Member State albeit that determination must be consistent with the objective of giving wide access to justice to appropriate categories of persons. These conclusions derive from the Directive itself; they are also wholly consistent with the judgment of the Sullivan LJ in Garner. (Sullivan LJ gave the only reasoned judgment; the other members of the court agreed expressly with his judgment.)
13. If a claimant can satisfy the court that he is a member of the public concerned the Directive requires that he enjoys wide access to justice. Such a person will not enjoy that right if the proceedings in which he must engage are "prohibitively expensive." One of the ways in which a court can ensure that proceedings are not prohibitively expensive is by making a protective costs order upon appropriate terms in favour of a claimant. The Directive does not define the phrase "prohibitively expensive." As Sullivan LJ points out in Garner (see paragraph 42) the issue of how to determine whether proceedings are prohibitively expensive raises an important point of principle.

"Should the question whether the procedure is or is not prohibitively expensive be decided on an "objective" basis by reference to the ability of an "ordinary" member of the public to meet the potential liability for costs, or should it be decided on a "subjective" basis by reference to the means of the particular claimant, or upon some combination of the two bases?"

14. Sullivan LJ answers the point of principle in paragraph 46 of his judgment. I quote:

"46. Whether or not the proper approach to the "not prohibitively expensive requirement under article 10a" should be a wholly objective one, I am satisfied that a purely subjective approach… is not consistent with the objectives underlying the Directive. Even if it is either permissible or necessary to have some regard to the financial circumstances of the individual claimant, the underlying purpose of the Directive to ensure that members of the public concerned having a sufficient interest should have access to a review procedure which is not prohibitively expensive would be frustrated if the court was entitled to consider the matter solely by reference to the means of the claimant who happened to come forward, without having to consider whether the potential cost would be prohibitively expensive for an ordinary member of the "public concerned"."

My approach to the issue of whether these proceedings are "prohibitively expensive" is governed by this statement of principle.

15. The principles upon which a court should act when deciding whether or not to grant a protective costs order have evolved in recent times. In R v (Corner House Research) v Secretary of State for Trade and Industry the Court of Appeal formulate the principles in the following terms (to be found in the judgment of Brooke LJ at paragraphs 74-76).

"74. 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.

75. A PCO can take a number of different forms and the choice of the form of the order is an important aspect of the discretion exercised by the judge. In the present judgment we have noted: i) a case where the claimant's lawyers were acting pro bono, and the effect of the PCO was to prescribe in advance that there would be no order as to costs in the substantive proceedings whatever the outcome… ii) a case where the claimants were expecting to have their reasonable costs reimbursed in full if they won, but sought an order capping (at £25,000) their maximum liability for costs if they lost …iii) a case similar to (ii) except that the claimants sought an order to the effect that there would be no order as to costs if they lost … iv) the present case where the claimants are bringing the proceedings with the benefit of a CFA, which is otherwise identical to (iii).

76. There is of course room for considerable variation, depending on what is appropriate and fair in each of the rare cases in which the question may arise. It is likely that a cost capping order for the claimants' costs will be required in all cases other than (i) above, and the principles underlying the court's judgment in King v Telegraph Group Ltd (Practice Note) [2005] 1WLR 2282, paras 101-102 will always be applicable. We would rephrase that guidance in these terms in the present context.

i) When making any PCO where the applicant is seeking an order for costs in its favour if it wins, the court should prescribe by way of a capping order a total amount of the recoverable costs which will be inclusive, so far as a CFA-funded party is concerned, of any additional liability. ii) The purpose of the PCO will be to limit or extinguish the liability of the applicant if it loses, and as a balancing factor the liability of the defendant for the applicant's costs if the defendant loses will thus be restricted to a reasonably modest amount. The applicant should expect the capping order to restrict it to solicitors' fees and a fee for a single advocate of junior counsel status that is no more than modest.

iii) The overriding purpose of exercising this jurisdiction is to enable the applicant to present its case to the court with a reasonably competent advocate without being exposed to such serious financial risks that would deter it from advancing a case of general public importance at all, where the court considers that it is in the public interest that an order should be made. The beneficiary of a PCO must not expect the capping order that will accompany the PCO to permit anything other than modest representation, and must arrange its legal representation (when its lawyers are not willing to act pro bono) accordingly.

16. All the parties before me accept that the principles in Corner House require modification when the case in which a protective costs order is sought is one which falls within the Directive. In Morgan & Baker the Hinton Organics (Wessex) Ltd [2009] EWCA 107 Carnwath LJ, giving the judgment of the court, reviewed the relevant authorities relating to protective costs orders in cases in which the Aarhus Convention applies. Paragraph 47 of his judgment is in the following terms ..-

"47. It may be helpful at this point to draw together some of the threads of the discussion, without attempting definitive conclusions:

i) The requirement of the Convention that costs should not be 'prohibitively expensive' should be taken as applying to the total potential liability of claimants, including the threat of adverse costs orders.

ii) Certain EU Directives (not applicable in this case) have incorporated Aarhus principles, and thus given them direct effect in domestic law. In those cases, in the light of the Advocate-General's opinion in the Irish cases, the court's discretion may not be regarded as adequate implementation of the rule against prohibitive costs. Some more specific modification of the rules may need to be considered.

iii) With that possible exception, the rules of the CPR relating to the award of costs remain effective, including the ordinary 'loser pays' rule and the principles governing the court's discretion to depart from it. The principles of the Convention are at most a matter to which the court may have regard in exercising its discretion.

iv) This court has not encouraged the development of separate principles for 'environmental' cases (whether defined by reference to the Convention or otherwise). In particular the principles governing the grant of Protective Costs Orders apply alike to environmental and other public interest cases. The Corner House statement of those principles must now be regarded as settled as far as this court is concerned, but to be applied 'flexibly'. Further development or refinement is a matter for legislation or the Rules Committee.

v) The Jackson review provides an opportunity for considering the Aarhus principles in the context of the system for costs as a whole. Modifications of the present rules in the light of that report are likely to be matters for Parliament or the Civil Procedure Rules Committee. Even if we were otherwise attracted by Mr Wolfe's invitation (on behalf of CAJE) to provide guidelines on the operation of the Aarhus convention, this would not be the right time to do so.

vi) Apart from the issues of costs, the Convention requires remedies to be 'adequate and effective' and 'fair, equitable, timely'. The variety and lack of coherence of jurisdictional routes currently available to potential litigants may arguably be seen as additional obstacles in the way of achieving these objectives."

17. In Garner the court considered directly whether or not a court was entitled to reject an application for a protective costs order on the basis that the issues raised were not of general public importance which the public interest required to be resolved in cases to which the Directive applied. The unequivocal judgment of the court was that a judge was not entitled to reject an application for such an order because the issues raised were not of general public importance which the public interest required to be resolved.

The Relevant Facts in this case.

18. The Claimant is a Limited Company. It has adduced no evidence as to its assets or to its financial state generally. I was told by Mr Maurici, on behalf of the Defendant, (who is not contradicted by Counsel for the Claimant) that the claimant had no issued share capital. That information had been obtained from a company search. In his witness statement dated 3 September 2010 Mr Cammish says that there are "twenty six paid up members of the charity." – see paragraph 6. No elucidation of that assertion appears in the witness statement. Mr Cammish also says that he does not wish to disclose details of his finances and at least some persons associated with the Claimant wish their financial details to remain confidential – see paragraph 14. That same paragraph records:

"We are not fabulously wealthy and this has been a major commitment to us where we have had to draw upon our own savings and pensions. Indeed Mr Ron Howells, Miss Pauline Bowers, Mrs Lewis and Mrs Protheroe who are all retired have had to draw upon their personal pensions to fight the appeals."

19. In Paragraph 15, Mr Cammish says that the Claimant does not have the resources to fund its own costs in this judicial review and to pay the costs of an opposing party if it is unsuccessful. That is at odds with a letter sent to the solicitors for the Interested Party dated 21 July 2010 in which the Claimant's solicitor asserted that it did have the funds to pay the costs of successful parties if the claim for judicial review failed.
20. The reality is that there is a dirth of reliable information about the financial state of the Claimant and those who direct its activities.
21. In his witness statement Mr Cammish says, unequivocally, that if the Claimant fails to obtain a protective costs order it will have no alternative but to withdraw from the proceedings. I accept that as a true statement of the Claimant's intention as at the date of the application for the protective costs order.
22. As I have said, the Claimant took no part in the decision making process which led to the grant of planning permission by the Defendant to the Interested Party. I have already described the aims and objects of the Claimant; it seems to me to be obvious that the Claimant was wholly uninterested in the grant of consent under the Electricity Act 1989 and the associated deemed planning permission.
23. Mr Kimblin, on behalf of the claimant draws my attention to paragraphs 8 and 13 of Mr Cammish's witness statement. Paragraph 8 reads:

"During the last 2 years members of the Action Team(s) have conducted extensive research into the use of biomass and in particular virgin clean wood biomass as a source of fuel for power stations and power generation. Our findings have greatly alarmed us and in the two planning appeals public enquiry in Coedbach and Kings Dock we have and will raise serious concerns with security of supply of biomass, sustainability of biomass feed stock, and the widespread environmental damage of use of forest biomass on the scale proposed."

24. Paragraph 13 can be read as conveying an intention on the part of Mr Cammish and other persons associated with the claimant to involve themselves in challenging some of the important principles which, apparently, underpin the need for biomass power stations. Mr Kimblin relies upon these paragraphs, specifically, so as to support his contention that the Claimant had a sufficient interest to bring these proceedings.
25. At the outset of the hearing Mr Litton QC, on behalf of the Interested Party, gave a formal undertaking to the court that the Interested Party would not seek its costs of resisting the claim for judicial review against the Claimant (in the event that the claimant failed) save for the costs of preparing and filing the Acknowledgment of Service and Summary Grounds. However he also made it clear that the Interested Party would seek an order for costs against the Claimant in the event that the application for a Protective Costs Order fails and that it would seek an order for costs in the event of any unsuccessful appeal against my orders.
26. Both the Claimant and the Defendant provided estimates of costs should the claim proceed to a rolled-up hearing. The likely costs of the Claimant were within a range depending on a number of contingencies. For the purposes of this judgment it seems to me sufficient to record that the likely range was £45,000 - £60.000. The Defendant's costs are assessed as being approximately £27,000.

Discussion

27. Both Mr Maurici and Mr Litton QC submit that neither the Directive nor for that matter the Aarhus Convention have any relevance to this application for a protective costs order. That stance is taken, primarily, because they both submit that the Claimant is not a "member of the public concerned". They say that the Claimant is not affected or likely to be affected by the Defendant's decision. Further or alternatively it does not have a sufficient interest and/or it is not maintaining the impairment of a right in these proceedings.
28. These issues must be determined in accordance with the relevant domestic law. The Directive says as much and the judgment of Sullivan LJ in Garner proceeds on that basis. Mr Kimblin did not suggest otherwise.
29. I accept the submissions made on behalf of the Defendant and Interested Party that the Claimant is not a member of the public concerned and it is not a person having a sufficient interest. The Claimant is a limited company whose aims and objects are made clear, unequivocally, in its Memorandum of Association. Its aim is to protect a particular local environment. The Claimant played no part in the decision-making process leading to the grant of the consents to the Interested Party. But for the coincidence that the planning appeals with which the claimant is concerned were in progress at a time when the Defendant's decision was made it is clear, in my judgment, that the Claimant would have shown no interest in challenging the lawfulness of the Defendant's decision. The Claimant readily accepts that its sole purpose in challenging the Defendant's decision is to prevent it becoming material to the decisions to be made in the planning appeals in which the Claimant is an objector.
30. During the course of the hearing there was some debate as to the status and/ or relevance of the Defendant's decision in the planning appeals. I accept the submission of Mr Maurici that the Defendant's decision can be no more than a material consideration. It cannot be said, as was suggested by Mr. Kimblin, that part of the reasoning of the Defendant in support of his decision constitutes an expression of the Defendant's policy which would be binding upon an Inspector appointed by the Welsh Ministers to conduct the planning appeals in which the Claimant appears as an objector. Even if the Defendant's decision is treated as a material consideration by the Inspector considering the appeals I infer that it will be but one of a host of factors which will be considered. Mr Kimblin did not suggest before me that the acceptance of the Defendant's decision as a material consideration would be, in effect, determinative of the planning appeals.
31. In any event it must be borne in mind when assessing whether the Claimant has a sufficient interest for the purposes of the Directive that if the Defendant's decision is treated as a material consideration and if the appeals are allowed the Claimant has the ability to challenge those decisions under section 288 Town and Country Planning Act 1990.
32. Mr Maurici prays in aid the Claimant's ability to challenge any successful appeals under section 288 as a free standing reason why the Defendant's decision in these proceedings should not be the subject of judicial review. He may be right. In my judgment, however, the existence of this "alternative remedy" is also relevant, at least in the context of a case such as the present, in assessing whether the Claimant is a member of the public concerned having a sufficient interest for the purposes of the Directive. I do not accept that this alternative remedy is illusory. It is illusory only if the Claimant so conducts its affairs that it has no funds to mount a challenge under section 288. That is a matter of choice for the Claimant. In my judgment the existence of the right to challenge any decisions in the appellate process which are adverse to the Claimant's objectives is a factor which militates against the conclusion that the Claimant is a member of the public concerned having a sufficient interest when challenging the Defendant's decision.
33. I have reached the clear conclusion that the Claimant is not a member of the public concerned for the purposes of the Directive. That being so the Directive is not material to my decision upon whether or not to grant a protective costs order.
34. I should make two further points in this context for completeness. Mr Kimblin acknowledges that the Claimant can bring itself within the Directive only if it establishes that it has a sufficient interest. It cannot, for example, assert that it is maintaining the impairment of a right; further, Mr. Kimblin does not suggest that the Claimant brings itself within the Directive because it is a non-governmental organisation falling within the provisions of Article 1(2).
35. I have so far considered the issue of sufficiency of interest simply to ascertain whether or not the Claimant can establish that it is entitled to rely upon the Directive as a relevant factor to be considered in my decision about whether to grant a protective costs order. It is also of significance that by virtue of section 31(3) of the Senior Courts Act 1981 permission to apply for judicial review shall be granted only to a person who has a "sufficient interest." The reasons which lead me to the view that the Claimant has no sufficient interest under the Directive also lead inexorably to the view that it has no sufficient interest to justify the grant of permission to bring these proceedings. I appreciate that the order of Beatson J anticipates that this issue will be debated and determined at the "rolled-up" hearing listed for 17 September. In those circumstances I make it clear that my expression of view in relation to whether the Claimant has a sufficient interest to justify the grant of permission is based only upon the evidence served to date and submissions made to date. It is not intended to be a definitive ruling that permission to apply for judicial review should be refused because the Claimant has no sufficient interest to bring the claim. That said, unless the Claimant adduces further persuasive evidence it is difficult to perceive of a basis upon which it can establish a sufficient interest to justify the grant of permission to bring these proceedings.
36. I have also reached the conclusion, although with much greater hesitation, that these proceedings are not prohibitively expensive. On the basis of Garner it is necessary for me to consider whether the potential costs of the litigation would be prohibitively expensive for an ordinary member of "the public concerned". Mr Kimblin did not suggest that the ordinary member of the public concerned was always a single individual. In my judgment it must be that a category of member of the public for these purposes is a limited company. The difficulty is that while one can make a reasonable assessment of the ordinary individual person – by reference, for example, to average wages or property owning status or the like, those objective indicators simply do not exist in the same way in relation to limited companies. My experience suggests that many limited companies would not regard an overall costs bill in the region of £70,000 as prohibitively expensive in relation to litigation about which they felt strongly. If one looks beyond the limited company to its members there must be literally thousands of companies – even private limited companies – in which approximately 25 people have an interest. I would not anticipate that each of those individuals would regard a potential outlay of about £3,000 each as prohibitively expensive in relation to litigation which was of importance to them.
37. In Garner Sullivan LJ left open whether it was permissible to have regard to the personal circumstances of the particular claimant. He did not determine that issue definitively but, in my judgment, the tenor of what he says tends to support the view that some regard should be paid to the individual circumstances of a claimant. There is nothing in the evidence in this case which persuades me that these proceedings are prohibitively expensive for the Claimant or, in context perhaps more importantly, the individuals who have an interest in the activities of the Claimant.
38. In cases in which the Directive has no application it is incumbent on me to follow the principles laid down in Corner House Research. As is apparent my conclusion is that the Directive is not relevant to this application because the Claimant is not a member of the public concerned having a sufficient interest. That being so I do not propose to dwell in any detail on the Corner House Research principles. It would be a strange decision indeed in which a judge concluded that a claimant had no sufficient interest in the proceedings to bring itself within the Directive, no sufficient interest to justify the grant of permission, that, in any event, the proceedings were not prohibitively expensive but yet on Corner House Research principles the claimant was entitled to a protective costs order. Such an outcome may not be impossible; however, this is not a case in which such an outcome can be suggested seriously.
39. I should also deal with a point raised by Mr Maurici for the first time during the course of oral argument. He made the submission that the prevailing orthodoxy is that protective costs orders in favour of limited companies are not necessary. He prayed in aid two specific passages from the report of the Working Group on Access to Environmental Justice entitled "Ensuring access to environmental justice in England and Wales". Mr Maurici relies, in particular, on paragraphs 56-58 of the Report:-

"56. As an alternative to seeking a PCO, groups of claimants have sometimes formed a limited liability company as a vehicle for litigation. The logic of the approach is simple. For example, residents of an area affected by a proposed development may wish to challenge a planning permission, and would generally need to identify a small number of individuals to act as claimants, with those claimants then being fully exposed to the costs of losing. Instead, by pursuing their challenge through a company created for the purpose, such persons can channel and limit liability for costs through a single entity.

57. It is now clear that such a company has the same standing in relation to the challenge that its members (e.g. the residents) would have and that it is not necessarily an abuse of the court process for a claim to be brought in that way. Any concern about the fact that costs liability would, all other things being equal, be no more than the value (often nominal) of the company can be dealt with through agreement about, or an order for, security for costs.

58. As far as we are aware, the level of security for costs in such cases has been based on conventional costs principles and not by reference to the requirements of Aarhus. We recommend that where a limited company is the claimant in a case to which Aarhus applies, judicial consideration is given to the level at which security for costs is set so as to ensure compliance with the requirements of the Convention. Provided this is done, we see no fundamental difficulty with that approach."

40. Sullivan J, as he then was, was Chairman of the Working Group which produced this Report. There was no suggestion in the hearing before me that the paragraphs quoted above incorrectly summarized the law or practice. In my judgment, the paragraphs do support a general proposition that a protective costs order in favour of a limited company is usually unnecessary since by its very nature the company can limit or virtually extinguish its potential liability for the costs of an opposing successful party. Indeed, as the paragraphs quoted above demonstrate a more thorny issue may be whether or not it is appropriate to make an order for security for costs against a limited company – particularly where the Directive applies. I should record, however, that in reaching my conclusion that a protective costs order should not be made in this case I have taken into account as a factor which militates against the making of an order in this case the fact that the Claimant is a private limited company.
41. I am conscious that Mr. Kimblin also relies upon passages in this Report in support of his application. In summary he relies upon those passages which tend to suggest that the burden of costs for the losing party can be a disincentive to challenging important environmental decisions. Ultimately, however, the passages upon which he relies do not assist in this case. I say that because the Report proceeds on the basis that the person seeking to challenge the environmental decision in question can demonstrate that he is a member of the public concerned who has a sufficient interest or who is maintaining the impairment of a right.
42. I have reached the clear conclusion that it would be unjust to make a protective costs order in this case and, accordingly, I decline to make such an order.