Oxfordshire Director of Legal

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Judicial review proceedings and local authority costs

Costs 44348788 l 146Following a recent High Court ruling, Butta Singh considers licensing policy, campaigners and the importance of local authorities being able to secure their costs in judicial review proceedings.

Following on from the report on Local Government Lawyer with regards to permission being granted to judicially review Hackney Council’s Statement of Licensing Policy, the claimant’s (We Love Hackney Ltd's) renewed application for a cost capping order (CCO) and the defendant’s (the London Borough of Hackney's) security for costs application were heard together in the High Court on 27 March 2019.

The claimant applied in October 2018 to judicially review the defendant’s decision to adopt its revised Statement of Licensing Policy in August 2018. Although the claimant, an association of local residents and businesses, took umbrage at the content of the policy in terms of its core hours policy and the retention and expansion of its Cumulative Impact Zones, the claimant’s judicial review application centred on the process that was adopted in approving the policy. The main grounds for the challenge related to an allegation that the Public Sector Equality Duty (PSED) has not been adequately considered in the report to the Full Council, and that the report had not adequately informed the councillors of the differing view and objections to the policy.

In their judicial review application, the claimant had applied for a CCO to cap its potential liability for the defendant’s costs of defending the judicial review. The local authority, in opposing both the claim and its cost capping application, also applied for a security for costs order to protect it in respect of the costs that it would incur in defending the judicial review.

Mr Justice Lavender in granting permission for the judicial review, on 25 January 2019, dismissed the claimant’s application for a CCO, explaining that the claimant had been formed by wealthy individuals with a commercial interest in the outcome of the proceedings, and directed that the defendant’s security for costs application should be decided at a hearing. Lavender J. also commented that the claim was one that might be found to fall within S.31(2A) of the Senior Courts Act 1981 i.e. “The High Court must refuse to grant relief on an application for judicial review… if it appears to the court 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 defendant’s security for costs application and the claimant’s renewed application for a cost capping order (CCO) were heard together before Mrs Justice Farbey DBE on 27 March 2019.

In determining whether the grounds of a CCO were met (having regard to section 88 of the Criminal Justice and Courts Act 2015) in We Love Hackney Ltd, R (On the Application Of) v London Borough of Hackney [2019] EWHC 1007, Farbey J. noted the professional and financial standing of the key individuals of the claimant company and those who formed the group and/or had been involved in the group prior to its incorporation.

In considering the claimant’s renewed application for a CCO Farbey J. unequivocally rejected the argument that these proceedings were of ‘general public importance’ – rather, it concerned matters that were specific to the defendant’s formulation of its revised licensing policy. She also concluded that there was no ‘general or important point of law’ that would be determined in these proceedings, and that those ‘likely to be directly affected’ did not include any clearly defined or identifiable persons or groups. As such the proceedings were not ‘public interest proceedings’.

Farbey J. also considered whether the effect of not making a CCO would be that the claimant would withdraw from the proceedings, but concluded that ‘this is an industry-driven campaign with the resources to resurrect some form of challenge’ against the local authority if the CCO was not made.

Furthermore, in considering ‘whether it would be reasonable for the claimant to withdraw the claim’, Farbey J. noted that the ‘claimant’s directors and significant supporters are individuals who have a commercial interest in the proceedings’ and accordingly did not accept that they ‘would individually or together be unable to fund litigation which they say is of great significance to them.’ Farbey J. went on to say that ‘…well-resourced individuals have chosen to litigate the claim via an impecunious company which has taken possession of funds donated by members of the public’ and considered that the directors and other backers of the company did not want ‘to fund the litigation beyond the level of third party support’ rather than them being incapable of doing so. Accordingly, the claimant’s renewed oral application for a CCO was dismissed with Farbey J. concluding that, ‘The suggestion that those well-resourced individuals who drive this litigation will, in the absence of a CCO, being denied access to justice is not realistic.’

Even though the claimant stated that the judicial review would be withdrawn should the CCO not be made, Farbey J. proceeded to consider and decide the defendant’s security for costs application.

The claimant stated that the application would stifle its claim and result in it not being able to proceed. The defendant argued that in order to make out that case the claimant would have to show that no third parties existed who could reasonably be expected to provide the security being sought. Farbey J. accepted this argument and said that the claimant ‘has successful and resourceful backers who have the funds to provide security and enable the claim to continue’.  She concluded that as ‘…the defendant may incur substantial costs in these proceedings with no realistic prospect of recovery in the event that the claim for judicial review were to be successfully resisted. There is therefore a risk of injustice if no order is made.’

Farbey J. accordingly ordered the claimant company to provide security for costs in the sum of £60,000 in favour of the defendant local authority.

Butta Singh is Senior Solicitor for Licensing & Corporate at the London Borough of Hackney and instructed leading counsel, David Matthias QC and Charles Streeten of Francis Taylor Building. Anisah Hilali, Trainee Solicitor at the council, is also working on the case for Hackney.