Mrs Justice Farbey, sitting in the Administrative Court, has dismissed a renewed application for a Costs Capping Order ("CCO") pursuant to section 88 of the Criminal Justice and Courts Act 2015 and has ordered We Love Hackney Limited ("WLH") to pay security for costs in the sum of £60,000 if it intends to proceed with its claim for judicial review.
The applications arose in the context of a claim for judicial review brought by WLH of a decision by the London Borough of Hackney ("the Council") to adopt a new statement of licensing policy.
The claim was brought on the basis that in adopting its core hours and cumulative impact area policies, the Council had failed to comply with the Public Sector Equality Duty ("PSED") and had failed to have regard to various relevant material considerations.
When bringing its claim, WLH also applied for a CCO, pursuant to section 88 of the Criminal Justice and Courts Act 2015. That section grants the court the power to make an order limiting or removing the liability of a party to judicial review proceedings to pay another party's costs where it is satisfied that the proceedings are public interest proceedings and that in the absence of a CCO, the claimant would withdraw the judicial review, and would be reasonable to do so.
In response to WLH's claim, the Council cross-applied for security for its costs of defending the proceedings, given that the Claimant was an essentially impecunious company.
On 25 January 2019, Mr Justice Lavender granted permission for judicial review, but refused the CCO application and listed the Council's application for security for costs to be determined at an oral hearing.
WLH renewed its application for a CCO and both matters were determined together by Farbey J following a full day's hearing on 17 April 2019.
In a careful and detailed written judgement she rejected WLH's application for a CCO and allowed the Council's application for security for costs, both for essentially the same reasons.
In doing so, she rejected the Claimant's submission that the claim constituted public interest proceedings.
At the hearing, leading Counsel for WLH had submitted that the claim was 'the most important since the Licensing Act 2003 came into force'. Farbey J disagreed and said that the grounds of claim "do not frame or raise any general challenge” and that the claim had "no general importance".
As regards the number of people "likely to be directly affected by the claim", she rejected the submission that the statutory wording was apt to include anyone who works in licensed premises, or who goes for a late night drink, or who wishes at some stage in the future to invest in licensable activities."
She therefore found that the proceedings were not public interest proceedings and that the public interest did not require the issues in dispute to be resolved.
She also held that, even accepting WLH's assurance to the court that it would withdraw the claim without a CCO, it would not be reasonable for it to do so. Specifically, she accepted the Council's submission that WLH was backed by a number of well-resourced individuals who had chosen to litigate the claim through an impecunious company which had taken possession of funds donated by members of the public. She said she had sympathy for the Council's submission that the claim was "an industry driven campaign" and agreed that "given their individual and cumulative financial resources... the directors and other backers do not want to fund the litigation beyond the level of third party support, rather than that they are incapable of doing so."
Finally, she rejected the argument that failure to grant a CCO would deny the Claimant access to justice in a claim worthy of the grant of permission for judicial review. In rejecting that submission she pointed out the circularity of relying on the grant of permission for judicial review in a statutory scheme that only applied to cases in which leave for judicial review has been granted. Moreover, as she notes, the fallacy in WLH's argument is that Parliament in the legislation has struck the balance between access to justice in public interest cases and the cost to the public purse of defending unsuccessful claims. As she concluded, in this case, "the suggestion that those well-resourced individuals who drive the litigation will, in the absence of a CCO, be denied access to justice is not realistic."
For essentially the same reasons, she granted the Council's application for security for costs.
Her final order required WLH to pay the Council's costs in the sum of £20,000 and to pay a further £60,000 into court by 8 May, in default of which the claim is to be struck out.
The case is of some importance as it highlights the importance of not accepting, without question, assertions made by claimants in support of applications for costs capping orders, and the, often under appreciated, strategic utility of applications for security for costs in public law claims where an impecunious company is used as a vessel to litigate on behalf of, and conceal the resources behind, commercially motivated claimants.
The official transcript is available here.
David Matthias QC and Charles Streeten acted for the London Borough of Hackney, instructed by Butta Singh of Hackney Legal and Governance Services.