1. Summary

1.1 The government has published a further consultation relating to the recent wide ranging judicial review reforms.  The majority of the reforms have been enacted through the Criminal Justice and Courts Act 2015 (CJCA).  However, some of the reforms in the CJCA relating to finances and costs have yet to be brought into force and consequently the government is seeking evidence and views in relation to:

(a) The new requirement that claimants provide information about how they will fund a judicial review;

(b) The threshold above which third party funding will have to be disclosed, which is proposed to be set at £1500; and

(c) The funding information requirements where a party is seeking an order to cap the liability of their costs in the event that their judicial review is unsuccessful (a “costs capping order” or “protective costs order”).

The government also seeks responses on the equalities impact of the proposals. 

1.2 Although the relevant primary legislation has already been passed, this consultation presents an opportunity to influence the shape of the rules which may have a significant effect on those seeking to challenge the decisions of public bodies.  The consultation indicates that the government are particularly keen to hear from charities, perhaps with good reason: this may be one of the groups most likely to be adversely affected by the new rules. 

1.3 We encourage anyone who has used judicial review in the past, or may do so in the future, to respond to the consultation (deadline 15 September 2015).   The issues arising from this consultation will be discussed at the Public Law Toolkit at BWB on 7 October 2015, along with consideration of the judicial review reforms in general and wider areas of public law, including the government’s proposal to repeal the Human Rights Act 1998. 

1.4 More detail on the consultation proposals is provided below.

2. Information about funding

2.1 The CJCA amended the requirements for obtaining permission for judicial review, so that the court may not grant permission unless the applicant has provided certain funding information, as specified in the court’s rules.   The primary legislation allows for the rules to require information about the source, nature and extent of financial resources available, or likely to be available, to meet liabilities arising in connection with the application for judicial review. In the case of corporate bodies that may not have enough money to meet the costs of the judicial review (including the defendant’s costs if they lose), information about their members’ ability to provide financial support may be required.  The primary legislation also provides that the court should have regard to the financial information provided by the claimant when making costs orders, and that it must consider making costs orders against those who are not a party but who have been identified as providing financial support.

2.2 Under the proposals outlined in the consultation, the relevant information would be provided by way of a declaration (chosen from a multiple choice list), supplemented with additional details in certain cases.  The appropriate declaration will depend on whether the claimant is a corporate body, whether legal aid is being sought, and whether the claimant has sufficient funds to cover the costs arising from the claim.  If the answer to the last question is negative, information must be provided on the claimant organisation’s members (in the case of corporate bodies) and/or details of third party funding.  It is envisaged that the judge in the case will be able to seek further information as they consider necessary and desirable.  All of the financial information provided by the claimant will be available to the court, but it will not be provided to the defendant or be made publicly available.

2.3 The consultation notes that it will be for the claimant to estimate the likely total cost of the judicial review, but they will not be required to provide the figure or justification for it as part of the financial information.  Nevertheless, the court would retain a power to request information on estimated costs if it requires it.  In many cases it may be difficult for claimants to accurately estimate the costs at the pre-permission stage.  The consultation itself refers to data on total cost which “is not particularly substantial or quality assured” and which estimates total costs for both parties ranging from £5,000 to £30,000.

2.4 The government believes that these requirements will not be unduly onerous, but is considering whether they should be amended or removed for certain types of claimants, and specifically cite charities as an example of this type of claimant.  Charities, particularly those with large memberships, may wish to consider how these rules may affect them and whether these proposals would impose a disproportionate burden compared to other claimants. 

2.5 There may also be uncertainty over the situation where a charity is funding the claim from a combination of its own resources (which are not likely to be enough to cover the liabilities arising from the claim) and third party funding.  Regular donations are likely to be included in a charity’s resources so would not require the donor’s details to be disclosed, whereas donations made specifically to fund the judicial review would fall within third party funding such that these details would need to be disclosed.  However, there may be grey areas in between where it is unclear whether the money forms part of the organisation’s resources or constitutes third party funding. 

2.6 It is also proposed that claimants will have a duty to inform the court where there is a material change in financial circumstances relative to the likely level of liabilities resulting from the claim.  One example of a material change is where a third party’s contribution increases from below to above the threshold.  There is insufficient detail in the proposals to suggest the impact this might have, but in the example above of a charity funding a claim from a combination of sources, it may be difficult to say at what point donations received after the application for judicial review is made result in a material change in circumstances. 

3. Third party funding threshold

3.1 As mentioned above, when applying for judicial review, a claimant may have to provide information about third party contributions.  The consultation suggests that this will only be required where the claim is being funded other than out of the claimant’s resources or legal aid.  In these circumstances, where the contribution exceeds the threshold, the claimant will have to disclose the name and address of the contributor and the size of their contribution.  The proposed threshold is £1,500: this is said to strike the balance between contributions which are indicative of a degree of third party control over the claim without capturing contributions made without any expectation of a relationship of control.  The consultation suggests that the figure has been set by reference to the lowest end of the estimated total costs of judicial review (£5,000); the consultation acknowledges potential pitfalls in the data available to the government and seeks further evidence of the total costs of claimants and on typical levels of third party contributions to judicial reviews.

3.2 It relation to a judicial review funded through donations, in many cases it seems unrealistic to suggest that £1,500 would buy control of the claim.  In the case of charities, no doubt such donations would be gratefully received, but not at the expense of allowing a third party to influence the claim (particularly given the need to act in accordance with their charitable objectives).  Similarly, those who contribute to crowdfunding causes are unlikely to do so with any expectation of control over the claim.  Whilst the number of contributions above the threshold may be few, such that the administrative burden of compliance with these rules may be relatively light, the more fundamental objection is the chilling effect that the proposals could have on donations.  The CJCA introduced a requirement that the court must have regard to the financial information provided, and must consider making a costs order against any third parties.  Whilst pre-CJCA the court had the power to order third parties to pay costs, the new rules will particularly expose third parties to such orders, which may discourage some from contributing to the funding of a judicial review.  Charities may wish to respond as to whether the suggested threshold is appropriate, particularly if it is aimed at identifying those who are controlling the judicial review. 

4. Costs capping orders

4.1 In certain circumstances, the court may grant an order capping the liability of a claimant to pay the defendant’s costs if they lose the claim (departing from the normal rule that the unsuccessful party pays the other side’s costs).  Such orders, now known as “costs capping orders” are only granted rarely, in cases of public importance and where the claimant would otherwise not bring the claim.  The CJCA has codified these rules, and the consultation is seeking responses to its proposals on the financial information required when seeking a costs capping order.  The required information would be a breakdown of significant assets (eg real property) and liabilities, income and significant regular expenditure.  It would include likely financial support from third parties. 

4.2 Corporate bodies (including charities) that are unlikely to have sufficient resources to meet the potential liabilities would also have to provide information on their members, including name, address and interest in and connection to the claimant (eg shareholding).  The application for a costs capping order, including the financial information, would be served on the defendant and, unless the court directs otherwise, interested parties.  The court would also be able to order that further information be provided; the consultation suggests that the court may wish to consider whether the claimant might seek further capital from its members if it were to face costs at the end of the proceedings.

4.3 Again, the consultation considers the possibility of amending or disapplying these requirements for certain types of organisation, and acknowledges that charities may find it onerous to identify all sources of financial support.  Charities may wish to express their views on this point.

5. Conclusion

5.1 Responding to the consultation provides an opportunity for those who may be involved in public law challenges in the future to clarify uncertainties and identify areas that may disproportionately affect certain groups, particularly charities.  The deadline for responding to the consultation is 15 September 2015.  These issues and more will be discussed by speakers from BWB, Matrix Chambers, NCVO and Friends of the Earth at the Public Law Toolkit on 7 October 2015.  Places can be booked by following this link.   

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Melanie Carter

Partner and Head of Public & Regulatory

+44(0)20 7551 7615

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Claire Whittle

Senior Associate

+44(0)20 7551 7605

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Posted on 13/08/2015 in Legal Updates

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