Scope of Protective Expenses Orders in environmental litigation

In the recent case Wildcat Haven CIC v Scottish Ministers, the Inner House of the Court of Session examined the scope of a Protective Expenses Order (PEO) in environmental litigation. The question was whether a PEO which had been granted in respect of the initial Outer House proceedings and appeal to the Inner House (the “reclaiming motion”), also covered the subsequent application for permission to appeal to the UK Supreme Court.

PEOs in environmental appeals and judicial reviews are governed by Chapter 58A of the Court of Session rules. They provide for a cap on the expenses that a party will have to pay if they are unsuccessful in their challenge. PEOs are designed to limit the financial liability of petitioners in environmental litigation, ensuring access to justice without prohibitive costs. They are an important part of complying with the UK’s obligations under the Aarhus Convention, which promotes public participation in environmental decision-making. Please refer to our previous article for further details.

By way of background, Wildcat Haven CIC challenged the grant of planning permission for a windfarm development in Aberdeenshire on the basis that it would disturb a population of wildcats. After the Lord Ordinary dismissed their challenge, Wildcat Haven CIC reclaimed (appealed) the decision. The Inner House refused the reclaiming motion and Wildcat Haven CIC then sought permission to appeal to the UK Supreme Court, which was also refused. Both the Scottish Ministers and the windfarm developer sought an award of expenses against Wildcat Haven CIC for the application to appeal to the UKSC. The petitioners argued this should be covered by the PEO.

The PEO was originally granted to cover only the proceedings in the Outer House, capping the petitioners’ liability at £10,000. This was later extended by an interlocutor to include the motion for review in the Inner House. The key issue was whether this extension impliedly covered the subsequent application for permission to appeal to the UK Supreme Court.

The Scottish Ministers and the developer argued that the application for permission to appeal to the Supreme Court was distinct from the reclaiming motion and thus not covered by the PEO. Conversely, Wildcat Haven CIC argued that the application for permission to appeal was part of the same process initiated by the reclaiming motion and should be covered by the PEO.

The court found that the interlocutor extending the PEO beyond the Outer House proceedings explicitly covered the motion for review in the Inner House (the reclaiming motion), but did not address any further application for permission to appeal to the UK Supreme Court. The proceedings relating to the motion for review ended when it was refused and, as no provision was made to extend the PEO to subsequent applications, the further application was not covered by the PEO cap. The Scottish Ministers and the developer are therefore entitled to an award of expenses for the application to appeal, which is not subject to the PEO’s cap.

Court of Session Rule 58A.8(2) provides that, subject to any review of the protective expenses order by the Inner House, a PEO granted for proceedings in the Outer House will apply to liability for expenses occasioned by an appeal against the Lord Ordinary’s decision. There is, however, no provision extending the scope of a PEO to cover any motion for permission to appeal to the UK Supreme Court.

If you are involved in litigation that raises issues of general public importance, please contact Jennifer Jack and Calum Gee in Harper Macleod’s specialist team for advice on applying for, or opposing, a protective expenses order.