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No green light for Protective Costs Orders in private law cases

 

Costs, especially fear of costs associated with unsuccessful legal action, are understandably a major factor that can put people off pursuing a public interest case. The PILS Project was set up to break down barriers to public interest litigation – and that’s why Protective Costs Orders (or PCOs) have always been of great interest to the Project.

 

Protective Costs Orders are orders made by the court which set a limit for any costs an unsuccessful applicant will have to pay in public interest cases.

 

From our roundtable with legal professionals in 2014, to our recent Guidance Note (published online last year), the PILS Project are always trying to learn more about how PCOs are being applied and to encourage their use in Northern Ireland.

 

For this reason, a recent High Court decision from England and Wales caught our attention: Maugham v Uber London Ltd [2019] EWHC 391 (Ch)

 

While the Court ultimately decided not to award a PCO, this case is useful as it clarifies some key points about the use of PCOs in England and Wales, including when they will - and when they will not - be awarded. The case involved ridesharing service Uber and the full decision can be found here.

 

Key points to note:

  • The High Court held that a Protective Costs Order cannot be made in private law litigation. (Private law concerns those cases in which a public body is not involved, in areas such as employment law or family law.)
  • A wider public interest in the issues does not mean that a PCO is possible. If the central issue is a private law claim, then a PCO will not be awarded.
  • The judgment from William Trower QC, sitting as judge of the High Court, confirmed the Eweida decision (handed down in 2009) which stated that PCOs cannot be made in private law cases. A public law element must exist before a PCO will be considered as an option. (Public law concerns the various rules and regulations that govern the exercise of power by public bodies).
  • In the Maugham case, even though the court had decided that a PCO couldn’t be awarded, William Trower QC still went through the criteria that PCOs should meet. These were first outlined in 2005 in the Corner House case.
  • The Corner House criteria are listed on page 5 of our Guidance Note on PCOs.
  • Ultimately, the Maugham judgment concluded that even if PCOs were an option in private law matters, then the Court would not have awarded a PCO in this case, as it failed to meet these essential Corner House criteria.
  • According to Herbert Smith Freehills, who acted for Uber, this is also the first decision relating to PCOs in the specific context of a claim under Part 7 of the Civil Procedure Rules. You can read their analysis here.
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Cost Order