Stephen Hawking and others v Secretary Of State for Health & Social Care and National Health Service Commissioning Board
The High Court held that a high profile judicial review brought by Professor Stephen Hawking and others, and funded by thousands of backers on CrowdJustice meets the statutory test for a costs capping order (“CCO”).
Since the new costs capping regime came into force following the Criminal Justice and Courts Act 2015 (“CJCA”) there has been little case law on the availability of CCOs for those of more than modest means, nor in relation to crowdfunding. The High Court’s decision in Hawking looked at some of the key factors in the statute.
The ruling is significant because:
The court held that “responsible” individuals ought to be able to bring forward a “public-spirited” case, which Cheema-Grubb J noted would not be possible if the claimants were exposed to open-ended financial liability;
It was held that the claimants need not be of very modest means in order for a cap to be granted;
The court positively acknowledged that where a judicial review is being crowdfunded, the public is funding both sides: the government is funded by taxpayers and the claimants by crowdfunding – and that such a case being publicly funded on both sides was eminently suited for a CCO;
It was noted that crowdfunding is inherently uncertain. The certainty provided by a CCO was considered to be critical for enabling individuals to take a public interest case forward;
The CCO ordered was not for the full amount of the sums raised thereby enabling the claimants’ lawyers own costs to be met.
On 26 January 2018 five claimants, comprising Professor Stephen Hawking and senior academics and doctors, were granted permission to bring a judicial review challenging the lawfulness of the government’s policy to create accountable care organisations (“ACOs”). The claimants argue that ACOs will lead to privatisation of the NHS.
In the order granting permission, Mr Justice Peter Walker refused the claimants’ application for a CCO, stating only that: “the claimants have proceeded by crowdfunding, and there is good reason to think that same course will enable them to fund any liability for costs”.
In an oral hearing on 22 February 2018, Cheema-Grubb J granted a reciprocal CCO, dismissing the defendants’ arguments that no cap should be granted. The defendants were also ordered to pay for the claimants’ costs of the hearing.
The statutory test for CCOs
Before considering the factors set out in sections 88 and 89 of the CJCA 2015, Cheema-Grubb J addressed a preliminary point, namely the defendants’ contention that there needed to be “exceptional” reasons for her to reconsider Walker J’s decision on the papers. She determined that parties are permitted to seek a review of a decision on the papers as a decision may be different after oral submissions.
Cheema-Grubb J then proceeded to consider the test set out in section 88(6) of the CJCA 2015:
“The court may make a costs capping order only if it is satisfied that—
(a) the proceedings are public interest proceedings,
(b) in the absence of the order, the applicant for judicial review would withdraw the application for judicial review or cease to participate in the proceedings, and
(c) it would be reasonable for the applicant for judicial review to do so.”
1) Are the proceedings “public interest proceedings”?
Sections 88(7) and 88(8) set out the test as to whether proceedings are in the “public interest”. In considering this first limb, Cheema-Grubb J noted that the grant of permission itself would not necessarily mean the public interest test had been met. She considered the parties’ submissions, in particular the fact that the Secretary of State had agreed to engage in a public consultation after the application for judicial review had been filed. While noting this diminished some of the public interest in the claim, it was held that it was highly likely that some of the concerns raised in the judicial review had a high degree of public interest and therefore met the “public interest” test.
2) Without the CCO, would the claimants discontinue the proceedings?
Cheema-Grubb J accepted the claimants’ evidence that they would withdraw their claim in the absence of a CCO noting their statements were made in the context of open-ended costs liability. She also noted the inherently uncertain nature of crowdfunding in the context of this limb.
3) Would it be reasonable for the claimants to withdraw their claim?
Cheema-Grubb J moved to the third limb, noting it was more difficult than the other two. The defendants argued that it would be unreasonable for the claimants to withdraw, because the claimants could be assumed to have sufficient resources and as people of means, should not benefit from the protection of the CCO regime. The defendants argued that together with their crowdfunding activity, the claimants were capable of covering any potential adverse costs exposure. Cheema-Grubb J rejected these arguments, and in granting the application, held that this was “just the sort of case” where a CCO should be harnessed.
She found she could distinguish Litvinenko (R (Litvinenko) v. Secretary of State for the Home Department  EWHC 3135 (Admin)), where a costs cap had been refused to the wife of the Russian defector in relation to a public inquiry, as in that case “the principal purpose was acutely personal”, and the claimant was a woman of very substantial means against the Secretary of State’s costs of c. £40,000 (as compared to the anticipated costs of the defendants in this case, anticipated to be more than £200,000).
In this case, several factors contributed to the finding that it would be unreasonable to expect the claimants to be exposed to an open-ended financial risk. She held that the reasonableness test was one “of substantial reasonableness” and noted:
The claim was being taken by “apparent public spiritedness” and not for a private interest by a responsible group, many with a history of working in the NHS;
The claimants were willing to meet a substantial degree of costs on behalf of the defendants by raising money through crowdfunding;
The claim was in no way capable of being described as “of minimal significance” or lacking in complexity;
Corner House (R. (on the application of Corner House Research) v Secretary of State for Trade and Industry  EWCA Civ 192) anticipates a variety of circumstances in which CCOs are available and can be made, not just situations in which a single claimant of very modest means may not be able to bring a claim at all;
The defendants costs are very high and without a costs cap there can be no certainty for the individual claimants as to their potential exposure. The claimants could not be criticised for being unreasonable in not proceeding in a case with open-ended potential liabilities. Certainty is needed so that the claimants can be sure of what their maximum exposure will be, and what fundraising targets they will need to set, so that they can make an informed decision whether to proceed or not.
In coming to her decision Cheema-Grubb J noted there were “clear parallels” with Lumsdon and Beety (R. (on the application of Lumsdon) v Legal Services Board  EWCA Civ 421 and R. (on the application of Beety) v Nursing and Midwifery Council (unreported), respectively).
Cheema-Grubb J noted that as the public was funding both sides in this case: as taxpayers for the defendants and through thousands of people via CrowdJustice for the claimants, a CCO was “entirely appropriate”.
CCO and reciprocal cap granted
Cheema-Grubb J ordered a CCO limited to £80,000 in respect of each defendant’s costs (i.e., £160,000 in total) and a reciprocal cap of £115,000 in respect of the claimant’s costs. The claimants had had raised nearly £265,000 after three rounds of crowdfunding and private donations, so the ruling enabled relatively substantial funds to meet the costs of the claimants’ lawyers.
This is consistent with the decision in Beety where a CCO of £25,000 was granted in circumstances where the claimants (Independent Midwives UK) had resources of £40,000, of which £25,000 was crowdfunded. There, Ouseley J is reported as noting that it was not realistic to expect public law firms to act pro bono or on a pure CFA.
Legal counsel for the parties
Peter Mant of 39 Essex Chambers and Kate Harrison of Harrison Grant Solicitors for the Claimants;
Holly Stout of 11KBW for the First Defendant (Secretary of State for Health and Social Care);
Rose Grogan of 39 Essex Chambers for the Second Defendant (National Health Service Commissioning Board).
Joanna Sidhu, Head of UK
An experienced litigator, Jo worked at Ashurst on High Court and international litigation and a pro bono project with unaccompanied refugee children in France before joining CrowdJustice.
Julia Salasky, CEO/Founder
Julia has worked as a lawyer at international firm Linklaters, a legal aid clinic, and the United Nations. She has been named one of Debretts most influential people in law, and an industry leader by Law.com in litigation finance.