EU judgement: Ruling on assessment of costs in legal challenges on environment

The queen, on the application of David Edwards and Lillian Pallikaropoulos v Environment Agency and others

European Court of Justice
Judgment was delivered on April 11th, 2013, by the fourth chamber consisting of L Bay Larsen, acting as president, J C Bonicot (rapporteur), and Judge C Toader, Judge A Prechal and Judge E Jarasiunas.

Judgment
Persons should not be prevented from seeking, or pursuing a claim for, a review by the courts of environmental matters because of the financial burden that might arise as a result.

Where a national court is assessing costs against such a person, the cost of the proceedings "must neither exceed the financial resources of the person concerned nor appear, in any event, to be objectively unreasonable".

Background
In 2008, Lillian Pallikaropoulos was ordered by the House of Lords to pay the full costs of opposing parties, totalling over £88,000 (€103,000), in a failed appeal against the granting of a permit for a cement works.

The jurisdiction of the House of Lords was transferred to the newly-established Supreme Court in the UK in October 2009. It stayed proceedings challenging the costs and referred a series of questions to the ECJ. These included:

How should a national court approach the question of awards of costs against a member of the public who is an unsuccessful claimant in an environmental claim having regard to the requirements of Article 9 (4) of the Aarhus Convention, as implemented by Article 10a of Directive 85/337 and article 15a of directive 96/61?

Should the question whether the cost of the litigation is or is not “prohibitively expensive” within the meaning of article 9(4) of the Aarhus Convention be decided on an objective or subjective basis, or a combination of both?

Decision
The objective of the EU legislature is to give the public concerned "wide access to justice" and that objective relates to the desire of the legislature to "preserve, protect and improve the quality of the environment" and to ensure that "the public plays an active role".

The court pointed out the term “not prohibitively expensive” does not prevent the national courts from making an order for costs, as decided in Commission v Ireland (2009) ECR I-6277.

The prohibitive nature of costs must therefore be assessed as a whole, taking into account all the costs borne by the party concerned. It also found the assessment of costs “cannot be a matter for national law alone”.

The court found persons covered by procedures under directive 85/337 and directive 96/61, “shall not be prevented from seeking or pursuing a claim for a review of the courts . . . by reason of financial burden that might arise as a result”.

Where a national court is called upon to make an order for costs against a member of the public who is an unsuccessful claimant, “it must satisfy itself that that requirement has been complied with taking into account both the interest of the person wishing to defend his rights and the public interest in the protection of the environment.

“That assessment cannot be carried out solely on the basis of the financial situation of the person concerned, but must also be based on an objective analysis of the amount of the costs,” the court said.

The cost of the proceedings “must neither exceed the financial resources of the person concerned nor appear, in any event, to be objectively unreasonable”.

The court must take into account “the situation of the parties concerned, whether the claimant has a reasonable prospect of success, the importance of what is at stake for the claimant and for the protection of the environment, the complexity of the relevant law and procedure and the potentially frivolous nature of the claim” as well as “the existence of a national legal aid scheme or a costs protection regime.”

In deciding on costs, “no distinction” should be made “whether the national court is deciding on costs at the conclusion of first-instance proceedings, an appeal or a second appeal”. The fact that the plaintiff had not been deterred in taking action “is not in itself sufficient to establish the proceedings are not, as far as that claimant is concerned, prohibitively expensive”.

– FIONA GARTLAND

Full judgment on curia.europa.eu