New rules regarding when a court may cap how much an unsuccessful judicial review claimant can be ordered to pay for the other parties’ costs will come into force on 8 August 2016. This will be of interest to organisations which may bring public interest judicial reviews but have limited financial means, and public bodies defending such claims.

Costs capping orders (CCOs), previously known as “protective costs orders”, were developed by the courts to help claimants with public interest challenges from being deterred by fears of facing huge costs orders if they lose. The criteria for a CCO include consideration of:

  • whether issues of public importance are involved that are required to be resolved in the public interest;
  • the claimant’s interest in the case;
  • the fairness of making an order in light of the claimant’s financial resources and likely costs of the case; and
  • whether the claimant would be unlikely to continue the claim without a CCO (and would be acting reasonably if so).

The new rules (set out in sections 88-90 of the Criminal Justice and Courts Act 2015) largely codify these criteria but make a number of significant changes. First, a CCO may only be made once permission for judicial review has been granted. Previously it could be made at the outset of a claim before the defendant had incurred many costs. This is significant because it potentially exposes claimants to costs up to the permission stage, which can run into tens of thousands of pounds.

Second, further to the new CPR 46.17 and amended Practice Direction 46 claimants must also provide:

(a) A summary of the applicant’s financial resources (significant assets, liabilities, income and expenditure, and the aggregate amount of any financial support provided or likely to be provided to the claimant by other persons);
(b) An estimate of the costs the parties are likely to incur in the proceedings; and
(c) In the case of corporate bodies, whether the claimant is likely to have financial resources available to meet liabilities arising in connection with the proceedings (where this is not the case, the court will consider making a direction requiring the claimant to provide information about its members and their ability to provide financial support for the purposes of the proceedings).

Controls on CCOs are clearly necessary to ensure they are granted only when truly required in the public interest (after all, the shortfall of unrecoverable costs in an unsuccessful CCO protected claim falls on the publicly funded defendant public authority). However, there is a danger the new rules go too far in placing undue burdens and risk on claimants bringing public interest claims, at the expense of access to justice.


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Melanie Carter

Partner and Head of Public & Regulatory

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+44(0)20 7551 7615

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m.carter@bwbllp.com
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Emma Dowden-Teale

Senior Associate

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+44(0)20 7551 7890

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e.dowden-teale@bwbllp.com
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Posted on 27/07/2016 in Legal Updates

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