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Debate continues over the suitability of the costs regime for environmental civil claims


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Summary: Environmental civil claims against operators were very much on the rise in the UK until the litigation funding restrictions in the 2013 Jackson reforms started to make claimants think twice about instructing solicitors and launching proceedings. The threat of such claims does remain however, and those wanting a better deal for claimants are lobbying hard for a change that will allow the claims to be brought with less financial risk.

When the Jackson litigation costs reforms came into force in 2013, it became rather less attractive for claimants to bring environmental civil claims against their neighbours in respect of, for example, odour nuisance. 

Why was this?  In short, following the reforms, claimants (assuming they won) could no longer claim their after the event insurance premium or the success fee that they had agreed with their lawyers from the defendant.   They had to pay for these things themselves and, in view of the limited damages available for most environmental civil claims, doing so was difficult.  Against this backdrop, only the strongest cases and/or cases with significant damages at stake were worth bringing.   

Environmental civil claims have certainly not dried up completely.  Indeed, some very large cases against UK-based companies with overseas operations have recently hit the headlines:

  • A significant claim is under way against a UK-domiciled company and its Zambian-domiciled subsidiary by a group of 1,826 Zambian villagers in respect of alleged environmental pollution in Zambia.
  • The High Court is considering whether claims can be brought in the UK against Royal Dutch Shell (incorporated in the UK) and its Nigerian subsidiary, the Shell Petroleum Development Company of Nigeria, by two Nigerian communities, who are seeking about £100m in compensation in connection with alleged repeated oil spills from the subsidiary’s pipelines in the Niger Delta.

These, however, are big, high profile cases with significant damages at stake.  Overall, claim activity in this area has decreased as a result of the Jackson reforms.

The big question is whether the costs playing field will ever start to tilt more favourably towards claimants to enable smaller, more run-of-the-mill cases to be brought as easily as they once were.

Claimant lawyers have been active in trying to bring about change.  Referring to the UNECE Convention on Access to Information, Public Participation in Decision Making and Access to Justice in Environmental Matters (the “Aarhus Convention”, to which the UK is a party), they have tried to claim that environmental civil claims are “prohibitively expensive” to bring as things currently stand and that this – in the absence of anything to rectify the problem – is a breach of a fundamental requirement of the Convention.

Thus far, their efforts have had little traction with the UK courts (see, for example, the 2014 private nuisance case of Austin v Miller Argent (South Wales) Limited, where it was decided that whilst cases in private nuisance can in principle fall within the scope and requirements of the Aarhus Convention, most – including the case of Mrs Austin herself - will not). 

Nor have they obtained much traction with the Government, which decided in November 2016 not to extend its current Aarhus Convention-related Environmental Costs Protection Regime to private nuisance cases or to other types of cases which could be brought against private individuals. 

The matter is not yet set in stone, however.  Notwithstanding the decision that it has taken, the Government has promised to continue considering how best to address perceived costs issues in private nuisance cases and other types of environmental cases which could be brought against private individuals.  There is still something to play for. 

Weighing heavily in the Government’s mind when it considers this matter again in the future will be the very recent findings of the Aarhus Convention Compliance committee on 29 November 2016 in relation to the costs implications to claimants in private nuisance cases like the Austin case (referred to above).  The findings indicate that the Committee is rather more supportive of private nuisance proceedings falling within the scope of the Aarhus Convention than the Government or the courts have been to date, and is not convinced that such proceedings are not prohibitively expensive for claimants to bring.

Developments in this area will be watched with interest.

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