PEOs have existed in common law for a number of years, but were codified in Scotland in March 2013 in the form of Rule 58A of the Rules of the Court of Session 1994 (implementing Directive 2011/92/EU (on the assessment of the effects of certain public and private projects on the environment) and 2008/1/EC (concerning integrated pollution prevention and control)).
Powers of the Court
If the Court is satisfied that the proceedings would otherwise be prohibitively expensive, the Court must make a PEO, unless:
- the applicant fails to demonstrate a sufficient interest in the subject matter of the proceedings; or
- the proceedings have no real prospect of success.
As part of the application, the applicant for a PEO is required to lodge schedule estimating:
- the expenses of the applicant in relation to the proceedings; and
- the expenses of each other party for which the applicant may be liable.
The applicant must also lodge other documents in support of the application, e.g. details of the applicant's financial resources and vouching for this.
The usual provision is for the applicant's liability for expenses to be restricted to £5,000, and the respondents' liability to be restricted to £30,000, however, the applicant can seek for these to be varied. A PEO could also potentially exclude liability for expenses altogether.
Since the introduction of protective expenses orders in 2013, the matter has come before the Court on several occasions. We consider below issues raised in two recent decisions of the Court.
Carroll v Scottish Borders Council
In this decision, Lord Drummond Young provided further guidance on the following four aspects of applications for PEO's.
Whether proceedings are prohibitively expensive
- Consideration should be given objectively as to whether the likely expenses of the proceedings are beyond the applicant's available income and capital, i.e. it should be considered whether the likely expenses are prohibitively expenses for someone with the applicant's income and capital. It should not just be based on the applicant's own views on what they think they can afford.
- The applicant's solicitors should be able to estimate the likely expenses based on their experience of other cases and general charging rates.
- Case management hearings should be available to keep documents within a reasonable scale and to ensure the hearing is properly focused.
- In respect of issues of confidentiality of financial information, any such information should be lodged as productions which are confidential to the Court and parties.
Variation of the usual caps on expenses
Special cause would have to be shown to vary the usual limits of £5,000 and £30,000. The £5,000 cap may be reduced if the case was plainly of importance to the applicant and he or she had very limited resources. The £30,000 cross-cap may be increased as a result of the length of proceedings or the complexity of legal issues.
- Close neighbourhood proximity will normally be enough to establish sufficient interest if the development involves something which may reasonably be considered visually objectionable or otherwise undesirable.
- Non-governmental organisations would need to show that the proposal which was the subject of the judicial review or statutory appeal involves a threat to the environment which falls within their objects.
- There will no be sufficient interest where a challenge is raised by someone without a direct interest on the basis that those directly affected have chosen not to do so.
Real prospect of success
A real prospect of success means an arguable case with more than a remote prospect of success. This is a fairly low hurdle. If one or more of standard grounds of judicial review appear to be stateable, this is sufficient. In planning cases, it may be significant in determining if there is a real prospect of success if councillors departed from the recommendations or advice they received from officials.
Friends of Loch Etive v Argyll & Bute Council
In this decision, Lord Malcolm looked behind the non-governmental organisation applicant to see who was truly the controlling party.
A charity had been created and was controlled and funded by an individual. The 3 trustees were the individual, his daughter and his employee. Although the charity only had £4,000 in its bank account, £70,000 had been donated by the individual since its creation. No further vouching was provided in respect of the financial resources of the trustees.
It was argued for the applicant that the environment cannot protect itself, and there should be no barriers placed in the way of environmental organisations. However, Lord Malcolm held that if consideration was limited to these factors, it would be always be open to individuals, no matter their resources, to obtain a PEO by setting up charitable organisations which they control. This would clearly be at odds with the purpose of PEOs.