When claimants bring a public-spirited judicial review, should they be exposed to open-ended adverse costs exposure? That was the question at stake in the recent High Court decision in Stephen Hawking and others v Secretary Of State for Health & Social Care and National Health Service Commissioning Board.
Cheema-Grubb J held that the principle of certainty, in respect of claimants who were bringing a claim not in their own personal interest, but in the public interest, was key to enabling such an important case to go ahead.
This decision is significant not only because it enabled “responsible” individuals to bring forward a “public-spirited” case, which the court held would not be possible if the claimants were exposed to open-ended financial liability without a costs capping order (CCO), but also because:
- The claimants were individuals of relatively significant means and had crowdfunded to meet their lawyers’ costs as well as adverse costs exposure.
- The court positively acknowledged that where a judicial review is crowdfunded, the public is funding both sides: the government by taxpayers and the claimants by crowdfunding.
- It was noted that crowdfunding is inherently uncertain. The certainty provided by a CCO was considered to be critical for enabling individuals to take a public interest case forward.
- The CCO ordered was not for the full amount of the sums raised, thereby enabling the claimants’ lawyers own costs to be met.
On 26 January 2018 a group of claimants, including Professor Stephen Hawking and other senior academics and doctors, were granted permission to bring a judicial review, challenging the government’s policy to create accountable care organisations which they argue will lead to privatisation of the NHS. Whilst they obtained permission, they were refused a CCO, with Walker J stating that “the claimants have proceeded by crowdfunding, and there is good reason to think that same course will enable them to fund any liability for costs”.
On 22 February 2018, following an oral hearing, the High Court held that this judicial review, funded by thousands of backers on CrowdJustice, met the statutory test for CCOs set out in the Criminal Justice and Courts Act 2015 (CJCA 2015).
The statutory test for CCOs
In granting the CCO, Cheema-Grubb J considered the test set out in section 88(6) of the CJCA 2015:
“The court may make a costs capping order only if it is satisfied that—
(a) the proceedings are public interest proceedings,
(b) in the absence of the order, the applicant for judicial review would withdraw the application for judicial review or cease to participate in the proceedings, and
(c) it would be reasonable for the applicant for judicial review to do so.”
1. Are the proceedings “public interest proceedings”?
It was noted that the grant of permission is not in itself sufficient. Even though the defendants had agreed to a public consultation after the judicial review had been filed, Cheema-Grubb J held that these proceedings raised concerns which had a “high degree” of public interest and therefore met this part of the test.
2. Without the CCO, would the claimants discontinue the proceedings?
Cheema-Grubb J rejected the defendants’ submissions that it was unreasonable for the claimants to withdraw because they could be assumed to have sufficient resources as people of means, and that together with their crowdfunding activity could cover any potential adverse costs exposure.
Rather, she held that this was “just the sort of case” where a CCO should be harnessed and that it would be unreasonable to expect the claimants to be exposed to open-ended financial risk. The factors the court considered included:
- The defendants’ costs were very high and without a costs cap there could be no certainty for the claimants as to their potential exposure. The claimants could not be criticised for being unreasonable in not proceeding with open-ended potential liabilities. The claimants needed certainty to inform them of fundraising targets and to allow them to make an informed decision on whether to proceed.
- The claim was taken with “apparent public spiritedness”, not for a private interest and by a responsible group with backgrounds working in the NHS.
- The claimants were willing to meet a substantial degree of the defendants’ costs by raising money through crowdfunding.
- The claim could not be described as “of minimal significance” or lacking in complexity.
- Corner House (R (on the application of Corner House Research) v Secretary of State for Trade and Industry) anticipated a variety of circumstances in which CCOs are available, not just situations in which a single claimant of very modest means may not be able to bring a claim.
In coming to her decision, Cheema-Grubb J noted that as the public was funding both sides in this case, as taxpayers for the defendants and through thousands of people via CrowdJustice for the claimants, a CCO was “entirely appropriate”.
Cheema-Grubb J found she could distinguish Litvinenko (R (Litvinenko) v Secretary of State for the Home Department) and noted that there were “clear parallels” with (R (on the application of Lumsdon) v Legal Services Board and R (on the application of Beety) v Nursing and Midwifery Council).
CCO and reciprocal cap granted
Cheema-Grubb J ordered a CCO of £80,000 in respect of each defendant’s costs (£160,000 in total) and a reciprocal cap of £115,000 in respect of the claimant’s costs. The claimants had raised nearly £265,000 after three rounds of crowdfunding and private donations, thus the decision provided for funds to meet the costs of the claimants’ lawyers.