Protective Expenses Orders can cut costs in environmental cases - Lindsay McCosh & Sindi Mules

​Lindsay McCosh & Sindi Mules explain the benefits of Protective Expenses Orders

In the face of the global climate crisis, an increasing raft of laws and policies on climate change and net-zero targets, and growing contestation in relation to projects such as forestry schemes and wind farm developments, a rising number of environmental cases are coming before the Scottish courts. In this context, understanding the risks and potential costs of bringing environmental proceedings is fundamental to individuals, charities, and community groups.

The Spectre of Adverse Expenses

In litigation in Scotland, the general principle is that expenses follow success. This means the successful party is usually awarded the expenses of the proceedings – a serious consideration when embarking on any litigation. The risk of being found liable for an opponent’s expenses may be more than a party is able to bear, preventing them from going to court altogether.

Lindsay McCosh is a Solicitor, Balfour+MansonLindsay McCosh is a Solicitor, Balfour+Manson
Lindsay McCosh is a Solicitor, Balfour+Manson

Access to Justice and Protective Expenses Orders

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To enable access to justice and mitigate against the risk of adverse expenses, a cost-capping mechanism known as “Protective Expenses Orders” (PEOs) has developed for public interest litigation where certain tests are met. Additionally, there is a specific regime for PEOs in environmental proceedings brought in the Court of Session, set out in Chapter 58A of the Rules.

These provisions apply to a range of environmental challenges, encompassing judicial review proceedings and statutory appeals of decisions, acts or omissions which contravene the law relating to the environment, and including appeals relating to requests for environmental information.

Once proceedings have been raised, applications must be made promptly (no later than is reasonably practicable after the applicant becomes aware that the petition or appeal is defended). The application must include a statement setting out the grounds for seeking the PEO, the terms on which the applicant is represented, and an estimate of expenses for the applicant and the opponent. Following recent changes to the rules, an applicant may ask for this information to be treated as confidential.

The application must be provided to the opposing party no less than 14 days before it is lodged with the court. Applications for PEOs are usually determined on the papers, and the court will primarily consider whether the proceedings are prohibitively expensive for the applicant.

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The default rules limit the applicant’s liability in expenses to the opponent to £5,000, and simultaneously limit the opponent’s liability in expenses to the applicant to £30,000. This is intended to address the inequality in resources between an individual or community group applicant and public body decision-makers. These amounts can be varied on cause shown, and may be varied to nil for both sides.

New rules in force from 1 October 2024 provide that expenses will not be awarded in favour of or against an intervener, which is encouraging for parties with sufficient interest and knowledge who wish to make a public interest intervention in order to assist the court.

In a landscape where environmental challenges are increasingly frequent, PEOs are an essential mechanism to mitigate against the risk of adverse expenses. Interestingly, recent research by the Scottish Civil Justice Council has highlighted that 12 PEOs were granted in environmental proceedings between 2013 and 2024, while four were refused. This should be heartening for potential environmental litigants, and the rules and developing practice on cost-capping measures in appeals and judicial review cases will certainly be an area to watch.

Lindsay McCosh is a Solicitor, Balfour+Manson. This article was co-written by Sindi Mules, Partner, Balfour+Manson.