Environmental Class Action blocked by Courts

In Austin & Others -v- Miller Argent (South Wales) Ltd [2011] EWCA Civ 928, the Court of Appeal has upheld a decision to refuse a Group Litigation Order (“GLO”) in respect of a claim by more than 500 residents who were trying to impose controls on a land reclamation scheme near Merthyr Tydfil.  A GLO is the means of bringing a class action in England and Wales and usually involves combining numerous low value claims in a single law suit thereby reducing the legal costs of bringing multiple claims.

The dispute between the parties related to an open cast mining operation being carried out pursuant to the scheme.  The residents alleged that dust and noise generated by coal extraction and other work constituted a private nuisance.  They intended to seek an injunction to stop the alleged nuisance and claim damages.

The residents applied for a GLO in order to allow the claims to be dealt with on a collective basis rather than 500 separate cases, which would have saved legal costs.  However, the Court refused the application on the grounds that there was insufficient information about the proposed claims and uncertainty as to whether the residents could fund the litigation.  In particular, only very limited information about the impact of the nuisance was provided and there were only two residents who had some level of legal expenses insurance cover.  The Court also ordered the residents to pay the Defendant’s costs of opposing the GLO application.

On appeal, the residents maintained that the Judge was wrong to refuse to grant the GLO.  They argued that the Judge should not have taken funding considerations into account since they were entitled to a protective costs order under the “Aarhus Convention”, which requires there to be proper consultation in respect of all administrative decisions affecting the environment.  The residents also argued that the Judge should not have ordered them to pay the Defendant’s costs as the Convention provided that this type of litigation should not be “prohibitively expensive”.  They also applied for a protective costs order to limit their costs liability in respect of the appeal.

The Court of Appeal upheld the original decision and rejected the residents’ arguments.  It found that, as no submissions on the Aarhus Convention had been made during the original application, the Judge had correctly decided not to make the GLO.  It concluded that the Defendant’s costs were not prohibitively expensive and that the Judge was therefore also right to make the costs order.  The Court also refused to make a protective costs order in respect of the appeal, commenting that every uninsured person who embarks on litigation must accept some degree of costs risk. 

The case highlights the difficulties involved in bringing a class action and, in particular, the need to supply enough information to satisfy the Court that a group of Claimants is committed and can afford to proceed with the claim.