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Not in my back yard! Changes to judicial review and their impact on the development sector

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03/06/2015

The Criminal Justice and Courts Act 2015 (the Act) came into force on 13 April. The reforms are part of an attempt to tackle what the government regards as a ‘problem’ of high numbers of expensive and spurious judicial review (JR) claims. The changes aim to ensure that only cases where a different outcome is likely progress through the judicial review process and there is a fairer sharing of costs. But will intention meet reality? What is the likely impact for development and house-building? Walker Morris’ Planning & Environment team consider the recent legislative developments.

Key reform 1: Substantially different outcome

Only those with “sufficient interest” can utilise JR to challenge the lawfulness of a decision or action of a public body/entity exercising a public function, provided permission is obtained from the court before the case is heard in full. As part of the reforms, a revised rule means judges must decline a JR application in certain instances. When considering JR applications, the court must now refuse to grant relief if it appears to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred.

The courts could previously only ‘quash’ a JR claim, and so effectively refuse to review a previous planning decision, if it was deemed the decision would have “inevitably been the same” – that is, the same decision would have been made regardless of any supposedly unlawful elements in the decision-making process. However, judicial discretion on this point has now been removed. So when considering whether or not to grant permission for a JR application to proceed, the judge may consider whether the outcome would have been “substantially different” for the claimant. The judge must then “refuse to grant leave” on an application if, having undertaken this consideration, he/she finds it “highly likely” the outcome would have been “substantially different…if the conduct complained of had not occurred”. The one exception is if the case is of “exceptional public interest”. There is no statutory definition of what may satisfy this “public interest” requirement. With no guidance yet provided, the term is open to wide interpretation.

Comment

This altered approach seems to bring a lowered threshold, giving the courts greater instances in which they can refuse to proceed with a JR application. Judges have always had the discretion to refuse leave, but the mandatory nature of the new requirement may give judges greater confidence to dispose of cases earlier. In addition, defendants could utilise this as an extra argument at the leave stage and emphasise that challenges on minor, detailed points should not progress. In planning cases, this is likely to herald a move away from an overly technical approach – where applicants exploit opportunities to ‘nit-pick’ small details, which do not essentially form a successful challenge, but delay the progress of development.

Key reform 2: Costs for interveners

In addition to the above, judges are now more readily able to rule that third parties given permission to join in JR proceedings (i.e. interveners) should pay their own legal costs. Only in exceptional circumstances will their costs have to be met by a principal party. In fact, if certain conditions are satisfied, an intervener may be required under court order to meet the costs incurred by the other parties as a result of its intervention. These conditions include where:

  • the intervener’s evidence and representations have not been of significant assistance to the court;
  • the intervener has, in reality, acted as the main claimant or defendant; or
  • the intervener has acted unreasonably.

Comment

Individual judges previously exercised discretion in deciding whether to enforce such a requirement. They tended to do so only in rare cases. Commentators suggest this will mean fewer charities, NGOs and campaigning groups will become involved in JR proceedings due to an inability to recover their costs.

Key reform 3: Costs orders and funding

A Protective Costs Order (PCO) acts to limit the amount of costs a claimant must pay if the claim is unsuccessful. A PCO could previously be made before permission to apply for JR has been granted. However, the Act now provides that the court can only issue a PCO once permission has been given for a JR claim to proceed. In addition, a statutory test must be satisfied before any PCO can be made – so a costs capping order should only be granted where:

  • the claim is a “public interest” claim (as defined in the Act); and
  • unless the PCO was granted, the claimant would have to withdraw and it would be reasonable for the claimant to do so.

The main instance where the new costs orders’ rules are to be disapplied is in relation to environmental claims. This is to ensure compliance with the Aarhus Convention, requiring public bodies to ensure public access to justice relating to environmental decisions. However, non-environmental planning cases will be subject to the full financial implications of the Act’s PCO restrictions.

Going forward, the High Court will also not grant leave to bring a JR action unless the applicant has provided the court with certain information about how the application is to be financed. This is likely to include details about the source, nature and extent of the applicant’s financial resources to meet any liabilities arising.

Comment

The level of detail and evidentiary requirements the courts are likely to demand in connection with this latter provision is unclear. However, the modifications relating to costs do bring a risk that individuals and action groups without funding will be prevented from pursuing JR due to inadequate resources. Some will regard this as hindering access to justice. However others will deem the legislative amendments as levelling the playing-field somewhat between claimant and defendant, particularly in development litigation.

Commencement and outcome

The changes introduced apply as follows:

  • Key reform 1 (“substantially different”) – to all High Court claims issued on or after 13 April 2015;
  • Key reform 2 (interveners) – to all High Court and Court of Appeal claims issued from 13 April 2015; and
  • other reforms – commencement date awaited.

The coalition government frequently cited legal challenges in the planning sphere as hampering the country’s economic growth. Reflecting this perception, in 2012 David Cameron announced the government would “charge more for [judicial] reviews so people think twice about time-wasting”. Only time will tell if the implementation of the Act will indeed result in fewer JR claims being brought and deter applications made simply as a delaying tactic, with limited prospects of long-term success. Some areas of ambiguity remain in the new provisions, which will have to be ‘ironed out’. In any event, all parties involved must still give serious thought to their participation in a JR claim, particularly where costs and funding are a consideration.

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