Comment: Balance key to capping judicial review costs

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The Scottish Government’s decision this week to consult on reform of the judicial review process should come as some relief to planning authorities and developers.

Because of changes in European law, it was necessary to set down formal rules capping legal costs, potentially opening the door to additional environmental-based challenges to planning applications for controversial developments such as waste management installations or large-scale wind farms in Scotland. The prospect of huge legal expenses had deterred many from launching a judicial review challenge. However, Protected Expenses Orders (PEOs) – awarded in cases like the Aberdeen bypass legal challenge and the Viking wind farm in Shetland – will shortly be put on a legislative footing to provide real certainty in capping legal costs of a challenger.

A PEO limits the financial liability of a challenger should they launch a judicial review, regardless of whether they are successful. The Scottish Government recently decided that a third party losing a judicial review would be liable for a maximum of £5,000 of their opponent’s costs and, in the event of a success, could recover up to £30,000 of their costs. This empowerment of an individual or small organisation is good for democracy, some might have thought, but at what cost to significant commercial developments, including, perhaps ironically, renewable energy projects?

The Scottish Government, which has ambitions to create a thriving, world-leading renewable energy industry in Scotland, may have recognised the potential for PEOs to open the floodgates in terms of court challenges and now appears to be looking to limit the number of judicial reviews. Under the consultation announced this week, it is proposing new measures to ensure the court would have to be satisfied that the challenge had a real prospect of success before a full hearing could take place.

This approach should strike the balance between ensuring the judicial system is accessible to all, but avoid stifling the progress of key developments.

• Ewan MacLeod is partner of the planning and environment group at legal firm Shepherd & Wedderburn.