UK Parliament / Open data

Criminal Justice and Courts Bill

My Lords, I am grateful once again to noble Lords for their contributions—brief but helpful. Your Lordships will understand that the amendments tabled by the noble Lord, Lord Pannick, seek significantly to undermine Clauses 74 and 75. I will begin by reminding the House what the clauses do. They build on case law, in particular the Corner House case, to establish a codified costs capping regime for judicial review proceedings with the aim of governing what we ordinarily refer to as protective costs orders.

The Government’s position, which I made clear throughout Committee, remains clear. We believe that costs protection should be available in appropriate cases but costs capping orders should not be made widely or, indeed, routinely. Alongside Clause 76, to which the noble Lord, Lord Pannick, referred, which excludes certain environmental cases from the new regime, these clauses ensure that costs protection is granted only in cases where there are serious issues of the highest public interest that would not be taken forward without an order. It is only in these cases that a public body defendant should have to pay its own costs regardless of whether it wins or loses.

As noble Lords have explained already, part of Amendment 166 would remove the effect of Clause 74(3), which provides that costs capping orders should be made only where permission to proceed to judicial review has been granted. I do not believe this is correct. It would mean that claimants with weak cases would benefit from costs protection even if the court subsequently decides that their case has no merit and that it should not be given permission for judicial review. This would leave the public body paying the costs of dealing with an ex hypothesi unmeritorious case.

As it stands, the clause does not mean that the costs of applying for permission will not be covered by the order. As is the situation now, if made, an order will be able to cover costs incurred prior to the grant of permission. This, I think, is the answer to what the noble Lord, Lord Pannick, described as a particular vice of these provisions. The claimant can, as now, ask the court to make the order as part as the permission application. But we feel that it is right that a claimant should bear the financial risk of bringing a weak claim.

Amendment 166 once again seeks to remove the requirement for the court to be provided with information on funding available, as well as what is likely to be available to a claimant, for use by the court when deciding whether to make a costs capping order, and for court rules to set out what that information should include.

As I have said, it is the Government’s position that a claimant should be required to provide information on how their case will be funded. Under the current regime, and as set out in the Corner House case, courts

are required to consider the financial resources of those who request costs capping orders. This is the very essence of why we have costs capping orders, something that we should, of course, replicate in this new regime.

Furthermore, setting out what information is required in court rules will give clarity to applicants about exactly what they need to provide. We cannot prejudge what the rules will say; I am sure noble Lords will be aware that this is a matter for the Civil Procedure Rule Committee. During the course of debates, some doubt seemed to be cast on the independence of the Civil Procedure Rule Committee. With respect, I think that doubt was misplaced. It is a committee chaired by the Master of the Rolls and contains, among others, Lord Justice Richards, all of whom, I am sure, with their experience and independence, will provide rules entirely independent of what the Secretary of State might or might not want. Of course, we expect that the information requested will be proportionate.

I turn to Amendment 167, which seeks to remove the third requirement in subsection (6), which is that an order can be made only if, without an order, it would be reasonable for the claimant to discontinue the judicial review. Again, this was a requirement of the Corner House case, and it is right that this remains. Doing anything other than this would make no sense. It would mean that well resourced claimants, including large companies, would be eligible for a costs capping order provided they could show that, without one, they would discontinue the claim, even though it would be entirely unreasonable for them to do so. This simply cannot be right. Indeed, it would mean they could be granted a costs capping order despite not being eligible under Corner House and the current regime.

Amendments 168 and 173 of the noble Lord, Lord Pannick, seek to remove entirely from Clauses 74 and 75 powers afforded to the Lord Chancellor to amend lists of matters within these clauses through statutory instrument. It is the priority of the Government to respond at pace to any future developments. These amendments would simply prevent our doing just that. It may well be that, in future, developments mean that it is considered necessary to make changes to the matters set out in these lists. Of course, as I have said, Parliament will still be able to scrutinise any changes as both powers are subject, not to the negative, but to the affirmative resolution procedure.

Turning now to Clause 75, which sets out in subsection (1) five non-exhaustive factors that the court must consider when deciding whether to make a costs capping order and its terms, Amendment 170 seeks to make it optional for the court to have regard to these factors. With the exception of paragraph (e), these factors are based on the principles taken from the Corner House case, and all five factors are important in ensuring that a costs capping order is not awarded where it is unnecessary, as is the Government’s case.

The courts retain significant discretion, as the clause does not dictate how much weight, if any, should be given to each factor. Furthermore, the list is not exhaustive, so the court may consider any other factors that it considers relevant.

The other amendments proposed by the noble Lord, Lord Pannick, would amend that list, first, so that the courts would not be required to have regard to whether the applicant might receive funding in the future and, secondly, so that the courts would not have to consider whether someone who might provide future funding would benefit from the judicial review. They would be told to ignore factors which, I respectfully suggest, are relevant. This would mean that the court would not have available to it a full picture of the claimant’s financial position when deciding whether it was appropriate to grant costs protection and, if so, at what level that protection should be set.

It is vital that the courts are made aware of the full financial underpinnings of a claim. This allows the court to assess whether a claim, although notionally brought by a claimant of limited means, is sufficiently well resourced not to require taxpayers’ subsidy by way of costs protection. It also allows the courts to ensure that, if they do make a capping order, the cap is made at the right level. Otherwise, it could result in the taxpayer being asked to pick up the bill for the defendant’s costs when the claimant would in fact have been in a position to pay.

If—and this is an important point—future financial support is not forthcoming, the claimant will be able to inform the court so that it can take the change of circumstances into consideration. We will invite the Civil Procedure Rule Committee to include this safeguard, which may be necessary, in court rules.

On removing the requirement that the court consider the benefit to a potential third-party funder, the Corner House case recognised that a claimant’s private interest in a case is a relevant factor when considering whether to grant a costs capping order. This requirement reflects that principle and the court should consider it as part of the full picture.

The clauses retain the principle that costs are a matter for the judiciary, a theme which has run through our debates today. When considering an application for a costs capping order in an individual case, it will be for the judge to decide whether the particular proceedings are in the public interest, whether an order should be made and, if so, what the terms of that order should be. That represents no change to the current position.

The noble Lord, Lord Pannick, effectively posed the question, “What’s wrong with the current position?”, and he did not understand there to be many cases concerned. I have asked for further data on this. I have to confess to the House that the Government’s data on costs capping orders are limited, but we have indicative figures from the Treasury Solicitor’s Department which estimate that, between September 2010 and August 2014, it was involved in at least 38 cases where protective costs orders were awarded, of which 14 related to non-environmental cases. However, these figures will not represent all judicial reviews, as the Treasury Solicitor’s Department does not represent all government departments, nor will the figures cover non-governmental defendants such as local authorities, so that the actual number of such orders may be that much higher. The noble Lord, Lord Beecham, may be fed up with references to the Richard III case, but a protective costs order

was made there and, as he will well know, the Government were unable to recover any money from the claimants because it was a shell company. It was created entirely to pursue the litigation, which turned out to be entirely baseless.

These are unusual orders. They should be made where the judge has as much information as he or she should have in order to be able to make them. Any other provision is simply saying, “The judge shouldn’t take into account matters which most people would think were relevant”. These clauses are to ensure that costs capping orders are made only in cases that genuinely need them—we are talking about public money here—and are set at a level that properly reflects the financial position of the claimant. With that perhaps rather overlong explanation, I ask noble Lords not to press their amendments and to agree to Clauses 74 and 75 standing part of the Bill.

Type
Proceeding contribution
Reference
756 cc1026-9 
Session
2014-15
Chamber / Committee
House of Lords chamber
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