In a significant legal development concerning environmental protection and agricultural subsidies, the High Court recently granted a protective costs order in a case involving a sheep farmer challenging a decision by the Secretary of State for the Environment, Food and Rural Affairs. The claimant, a stint-holder with grazing rights on Burnhope Moor in County Durham, sought judicial review after their appeal against the refusal of a sustainable farming subsidy under the Single Payment Scheme was dismissed. This case hinged on whether the proceedings could be classified as challenging national law related to the environment, thereby qualifying for cost protection under the Aarhus Convention.
Burnhope Moor, a vast area of rough upland grassland, holds designations as both a "special area of conservation" and a "special protection area," underscoring its ecological importance. Grazing rights on the moor are organized into "stints," each representing the capacity to sustain a specific number of animals. The Single Payment Scheme, established by Council Regulation (EC) 1782/2003, was an EU-wide initiative designed to provide direct income support to farmers, independent of production levels. The scheme was administered domestically by the Rural Payments Agency. The claimant, as a stint-holder, had made a claim under this scheme, which was subsequently denied.
The core of the claimant’s application for a protective costs order rested on two main arguments. Firstly, they contended that the judicial review proceedings constituted a challenge to a provision of national law relating to the environment, falling within the ambit of Article 9(3) of the Aarhus Convention. This convention aims to ensure public access to environmental information, public participation in environmental decision-making, and access to justice in environmental matters. Alternatively, the claimant sought a costs capping order under section 88 of the Criminal Justice and Courts Act 2015, asserting that the proceedings qualified as "public interest proceedings."
The High Court ultimately granted the application for a protective costs order, finding that the proceedings indeed fell within the scope of the Aarhus Convention. The court highlighted that the Single Payment Scheme was deeply intertwined with environmental protection. Article 3 of Council Regulation (EC) No 1782/2003, which governed the scheme, explicitly mandated that farmers receiving direct payments adhere to statutory management requirements and maintain good agricultural and environmental conditions. These statutory management requirements, as detailed in Article 4, encompassed public, animal, and plant health, as well as the environment itself, while Article 5 outlined the specifics of good agricultural and environmental condition. Crucially, Article 6 stipulated that non-compliance with these environmental and agricultural standards would lead to a reduction in payments.
The court emphasized that the legislative provisions underpinning the scheme had a clear dual purpose: agricultural and environmental protection. Payments were directly linked to "cross-compliance," a mechanism designed to ensure adherence to stringent standards of good agricultural and environmental condition. This direct link between the subsidy scheme and environmental stewardship distinguished the present case from others, such as R (Global Feedback Ltd) v HM Treasury, where environmental impact was deemed indirect. Here, the challenge was directly to the lawfulness of legislation implementing a scheme whose very purpose included the protection and regulation of agriculture and the environment. Therefore, the judicial review claim, being a complaint about a decision contravening EU and English legislation that itself relates to environmental protection, fell squarely within Article 9(3) of the Aarhus Convention, making the provisions for cost protection under CPR 46 applicable. Consequently, both the claimant and the defendant were entitled to a limit on the costs they could be ordered to pay.
However, the court determined that these proceedings did not constitute "public interest proceedings" for the purpose of section 88(6)(a) of the Criminal Justice and Courts Act 2015. This was primarily due to the limited number of individuals likely to be affected if relief were granted. The case centered on the intricate interplay of private law concerning commons registration and historical EU law governing agricultural subsidies, specifically the Single Payment Scheme and the Basic Payment Scheme. Given the unique nature of Burnhope Moor, which is exceptional among commons and stinted pastures, the direct impact of the judicial review was narrow. Only 24 of the 1,325 commons, including Burnhope Moor, are stinted pastures where freeholders claim under the Basic Payment Scheme. Even among these, Burnhope Moor’s historical circumstances made it disproportionately likely to generate a structural surplus and a claim by the freeholder. The court noted that a successful outcome for the claimant would, in most cases, result in modest payments to stint holders.
Furthermore, the court acknowledged that the landscape of agricultural subsidies is rapidly changing, with direct payments slated to end entirely by 2027 and a system of delinked payments introduced from 2024. The Direct Payments to Farmers (Reconsideration and Appeal) (Modification) (England) Regulations 2023 now prevent individuals from challenging payment decisions made up to and including 2023. While the case raised novel legal points regarding stints and commons registration, the court held that novelty alone does not equate to a point of law of general public importance requiring resolution in the public interest under section 88(7) of the 2015 Act. The claimant’s general public law interest in proper scrutiny of the decision was deemed insufficient to meet the threshold for a cost capping order if the claim did not qualify as an Aarhus Convention claim. This ruling underscores the specific criteria required for protective costs orders in environmental challenges and highlights the nuanced interpretation of "public interest" in such legal contexts.
