The cost of Access to Justice as a Constitutional Issue

The issue of access to justice, and specifically the cost of litigation as a bar to accessing justice, is rightly becoming a major constitutional issue in the UK.

In an address to the Australian Bar Association on 3 July 2017, Lord Neuberger, outgoing President of the Supreme Court, chose to speak on the topic of the cost of litigation and its impact on access to justice. Lord Neuberger said,

“It is all very well for us to sing the praises of our legal systems, to congratulate ourselves on the high quality of our judges and lawyers, and to take pride in the popularity of the common law in international business. But we have a serious problem with access to justice for ordinary citizens and small and medium sized businesses.”

He explained that access to justice must be real and not hypothetical in order for society to have confidence in the rule of law.

The same month brought two other significant judicial interventions on the topic of costs and access to justice. There was a unanimous decision of the Supreme Court in Unison, holding that the regime of fees applicable in employment claims is unlawful as it represents a violation of the common law right of access to justice. The second was Lord Justice Jackson’s extra-judicial Supplemental Report on Review of Civil Litigation Costs (“Supplemental Report”).

It is Jackson LJ’s Supplemental Report which is the main focus of this blog as chapter 10 addresses access to justice in judicial review claims and specifically the problem of the deterrent effect of the risk of paying adverse costs. In a previous blog, I suggested that the rule that a claimant must pay the costs of the defendant (and potentially other parties too) if their claim is lost represents the most pressing issue in public law, no less important that a formal restriction on the standing of claimants, since its operation in the context of judicial review means that the vast majority of the population are effectively barred from making an application for judicial review.

In his leading judgment in Unison, Lord Reed explained that the right of access to justice relates not just to rules that render access to the courts impossible but to “any hindrance or impediment” (§78). The litmus test articulated by the Supreme Court was whether there is a “a real risk that persons will effectively be prevented from having access to justice” (§87). The Court further held that in order for court fees to be lawful they must be set at a level “that everyone can afford” (§91).

Applying such criteria to the costs rules in judicial review, the answer is clear: those rules do create a real risk that persons are effectively prevented from having access to justice. Indeed, as we shall see, Jackson LJ found that the risk of adverse costs is a serious hindrance on access to justice, calling for major reform. The irony that the right of access to justice has been developed in judicial review procedure, which fails its own test for ensuring access to justice, is not only unmistakable, but disgraceful.

In the light of comments by Professor Zuckerman in another blog on this site, it is worth making clear that, as he rightly says (and I hope was clear from my own blog), the problem of adverse costs deterring claims is certainly not unique to judicial review. But the issue has been addressed in various ways in other areas of civil litigation. In particular, low value private law cases can be litigated at either no costs risk (small claims) or on a regime of fixed recoverable costs (“FRC”). However, such regimes do not apply to judicial review claims which — whether complex or straightforward, of huge financial value or of none – must be brought in the High Court and litigated as if they were a high value claim, subject to the ordinary rule that the loser pays the winners’ costs. For substantial high court litigation, this will often run to tens or even hundreds or thousands of pounds. This is one of the reasons (although by no means the only reason) why there is a specific problem in judicial review claims that calls for a bespoke solution, as Jackson LJ has himself recognised. I will briefly return to this issue below.

What does Jackson LJ’s report say?

The most important thing about Ch 10 of Jackson LJ’s Supplemental Report is his acceptance that the current costs regime renders judicial review no more than a hypothetical remedy for many people. He accepted that, “many claimants” are of modest means and these people, “are deterred from pursuing claims because of the adverse costs risk…” (Ch. 10, §1.5).

This is important and welcome recognition from a very senior judge that judicial review is, as a practical matter, barred to many people. It shows that the serious problem of access to justice that was identified by Lord Neuberger in his speech in July has a specific manifestation right under the noses of public lawyers, in relation to judicial review procedure itself.

Jackson LJ went on to accept that if judicial review becomes available to a wider section of the population this would inevitably mean that public bodies are subject to many more unmeritorious claims. However, he considered that whilst it might be both “tiresome and expensive” for public authorities to face such claims this is the price of a properly functioning system of judicial review. The permission stage exists to filter out such claims. He wrote:

“Despite those unwelcome burdens falling on public authorities, the ready availability of JR proceedings in which public bodies are held to account for their actions and decisions, is a vital part of our democracy. Both JR and a free press are, in their different ways, bulwarks against the misuse of power. (§3.2)

In other words, concerns that public authorities will face more claims if more people had access to judicial review is not a valid argument against the principle of access to justice.

What then should be done? Four options are on the table.

1. QOCS

In 2010 Jackson LJ proposed a system of Qualified One Way Costs Shifting (“QOCS”) for judicial review claims. QOCS is a system (currently applicable in cases involving personal injuries) in which a defendant is generally precluded from recovering any costs against an unsuccessful claimant.

Jackson LJ noted that his proposal that QOCS be adopted in judicial review cases had been neither accepted nor rejected by the Government but that, “it is probably realistic to proceed on the basis that QOCS in JR is not going to come” (§1.6) In other words, Jackson LJ did not depart from his view that QOCS is a preferable model for judicial review but he recognised that as a matter of political reality another solution has to be found.

2. FRC

Another potential option would be to adopt FRC so that claimants know their potential costs liability in advance. It would be fixed at a level roughly equivalent to the complexity of the case and its value. A case for such a solution was advanced by Professor Zuckerman in his blog.

Jackson LJ however was not in favour of FRC in judicial review. He noted a “general opposition” to the application of the fixed costs regime. There are several reasons for this, not all spelt out by Jackson LJ:

(1) FRC meets the problem of uncertainty but not the problem of affordability. Consider for example an individual who is refused British nationality and is faced with a moderately complex but apparently meritorious claim for judicial review. Unless the person is very wealthy they are unlikely to be able to afford costs associated with a judicial review lasting one or more days in the High Court even if those costs are fixed and known in advance.

(2) Second, since many judicial reviews are not claims with a financial value, litigants cannot be expected to incur a financial risk in the same way as when litigating to secure a debt or obtain damages, and litigation insurance is not generally available in cases with no direct or significant financial value.

(3) Third, as Jackson LJ noted, “costs are too variable” in judicial review to fit into a sensible costs grid for the stages of a judicial review claim (Ch. 10, §2.7(i)). This reflects the fact that judicial review, unlike other areas of litigation, spans a wide spectrum of cases in terms of value, importance and complexity.

3. CCOs

If QOCS and FRC do not provide solutions, what about the existing regime of Costs Capping Orders (“CCOs”) set out in ss.88-90, Criminal Justice and Courts Act 2015? This statutory CCOs regime replaces the common law Corner House protective costs orders in judicial review cases. However, in another striking and important part of his report, Jackson LJ was strident in his criticism of this regime. He accepted that, “CCOs are of little practical value” because the procedure for obtaining such orders is too cumbersome and too expensive and, as the criteria for granting CCOs are unacceptably wide, the “outcome of any application must be uncertain.” He also noted that a claimant cannot obtain a CCO until after permission has been granted.

A further criticism of the CCOs regime (that I have previously argued is a central failing) is that CCOs are only available in cases of general public importance and thus simply have no application to potential claimants aggrieved by unlawful decisions of public bodies without wider significance. As Lord Reed made clear in Unison, “the value to society of the right of access to the courts is not confined to cases in which the courts decide questions of general importance.” (§71).

4. Extension of the Aarhus regime

Having rejected QOCS, FCR and CCOs, Jackson LJ turned to the Aarhus regime which applies in environmental judicial reviews.

Article 9 of the UNECE Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (colloquially referred to as the Aarhus Convention) imposes an obligation on its signatories to establish procedures which are “not prohibitively expensive” to resolve environmental disputes.

This is reflected in EU environmental Directives and given effect in domestic law through part 45, Pt. VII of the Civil Procedure Rules. The rules limit the costs recoverable from claimants in environmental claims to £5,000 for individuals and £10,000 for companies, with a reciprocal cap on the costs that claimants can recover if successful of £35,000. The scheme is optional for claimants, so a claimant can decide to seek to recover all of their cost but will be exposed to full costs risk if they are unsuccessful. The optional nature of the regime is of particular importance in legally aided cases. Firms acting on legal aid rates – which are well below commercial rates- generally rely on the ability to recover their costs in full when successful as a means of ensuring the economic viability of pursuing legally aided cases (see R (E) v JFS School Governing Body (Costs).

These caps are capable of being varied by application at the permission stage of the judicial review claim. Controversial reforms to the Aarhus regime in February 2017 have allowed Defendants to apply to vary the cap on recoverable costs at any stage of the litigation. The High Court has recently held that this regime only provides the requisite certainty to protect access to justice, and thus comply with EU law, if strict conditions are read-in to the regime limiting the circumstances in which costs caps imposed at the permission stage can be varied (RSPB v Lord Chancellor).

Jackson LJ concluded that the Aarhus regime should be extended to cover all judicial review cases. He accepted that this was not perfect and that the prospect of incurring £5,000 adverse costs if a claim is lost will still deter many from bringing judicial review claims (this is of course in addition to a litigant’s own costs). But the regime provided a second-best solution to QOCS, and one that had already been road-tested.  He also emphasised the importance of the costs caps being fixed at the permission stage and proposed that if the claimant’s costs liability is increased above the default figure, the claimant should be permitted to discontinue within 21 days without the additional costs liability biting (§3.3 (v) and (vi)).

Is Jackson LJ’s proposal a good one?

In my previous post on this topic, I suggested that the best solution to the problem of access to justice in judicial review was a variant on the QOCS regime, which would provide the certainty of complete costs protection where this was justified but with an ability for a defendant to apply for a raised costs cap at an early stage where a claimant was able to afford to pay some adverse costs. The main difference between that suggestion and the extended Aarhus regime proposed by Lord Justice Jackson is that the latter has starting-point costs caps of £5,000/£10,000 and a reciprocal cap of £35,000. Both suggestions allow for variations to the costs cap at the permission stage.

Although claimants could apply to lower the £5,000 cap, the risk that significant costs might be incurred by a defendant before such an application is determined, and that the application might be refused, means that the deterrent effect of the £5,000 costs risk cannot be eliminated.  Jackson LJ himself recognised that the Aarhus regime provides only a second best solution which will still make litigating a judicial review claim unaffordable for many.

A second potential disadvantage to the extension of the Aarhus regime is that it might make heavy, complex public interests challenges more difficult to bring. At present, public interest claimants often bring such challenges with a CCO set at a low level such as £5,000 but with a reciprocal cap usually set much higher than £35,000, reflecting the fact that large-scale public interest challenges are uneconomic unless public interest law firms make a reasonable recovery when a claim succeeds. The £35,000 can however be increased, and this should mitigate if not obviate this problem.

Overall, Jackson LJ’s proposal is sensible, workable and coheres with existing principles. After all, it does not really make any sense for there to be a costs capping regime to ensure that environmental judicial reviews “are not prohibitively expensive” but no equivalent protection for all of the other judicial review claim.

Should judicial review be a special case?

Professor Zuckerman has objected to a bespoke regime for judicial review.  I have some sympathies with this view; but it does not in my view suggest that a regime of FCR should be applied to judicial review, for the reasons already explored.

Rather, there is a powerful case for a costs capping regime to be extended beyond judicial review to other cases in which individuals seek to vindicate rights against the State where the financial value of the claim is of secondary importance, or very low, such as in relation claims in misfeasance, or for assault and false imprisonment. Ensuring access to justice in judicial review claims would, however, be a good start.

Does the CCO regime violate the right of access to justice?

Finally, I wish to raise the question whether the Criminal Justice and Courts Act 2015 is incompatible with the right of access to justice.

Quite apart from the serious deficiencies in the CCOs regime highlighted by Jackson LJ, the 2015 Act provides in section 88(1) that it sets out an exclusive regime for capping adverse costs:

“88. Capping of costs

(1) A costs capping order may not be made by the High Court or the Court of Appeal in connection with judicial review proceedings except in accordance with this section and sections 89 and 90.”

The effect is that it where an individual is unable to access judicial review because of a justified fear of adverse costs, but where a CCO cannot be granted (for example because there is no general public importance), the hands of the courts are apparently tied. They cannot exercise their inherent jurisdiction to cap recoverable costs to ensure an individual has access to justice.

Jackson LJ noted that there would need to be statutory amendment to bring in his proposed regime of costs capping (the Aarhus regime is authorised in environmental cases by s.90). That may well be right, but the consequence is that s.88(1) operates as a statutory procedural bar on access to justice for many deserving claimants and one that would be particularly hard to defend on grounds of necessity and proportionality in the light of Jackson LJ’s report.

There is thus a powerful argument that the CCOs regime infringes the common law right of access to justice as well as the analogous rights implied in Article 6 ECHR and Article 47 of the EU Charter of Rights. What, then, is the consequence? The provisions may be too clear to be read down by reference to common law principles, but they might be amenable to re-interpretation under s.3 of the Human Rights Act 1998 and if not, it would be open to the courts to grant a declaration of incompatibility under s.4 of the 1998 Act. In cases engaging EU law, the provisions may fall to be dis-applied for breaching Article 47 of the EU Charter or the general principle of effectiveness (see e.g. Howe v Motor Insurers Bureau).

It unfortunately seems unlikely that reform of costs in judicial review will quickly render this issue academic.

Conclusion

The principle of access to justice has been developed by judges and by public lawyers into a central pillar of the modem constitution. A true commitment to that principle requires that it be given life in the real world, off the pages of the public law case book. And yet we have, as Lord Neuberger has recognised, a serious problem of access to justice in this country. We cannot expect the principle of access to justice to be taken seriously throughout the civil justice system if it is not taken seriously in the context of judicial review itself.

Tom Hickman, barrister at Blackstone Chambers and Reader in Public Law, UCL. Tom was a member of the “Westgate Committee” convened by Jackson LJ to consider the proposed extension of the Aarhus regime, but the views expressed are the author’s alone. Thanks to Jeff King for comments.

(Suggested citation: T. Hickman, ‘Public Law’s Disgrace: Part 2’, U.K. Const. L. Blog (26th Oct. 2017) (available at https://ukconstitutionallaw.org/))