CPR 46.27 Variation Refused Despite Financial Resources | Objective Unreasonableness Test Applied

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The High Court’s decision in R (The Badger Trust and Wild Justice) v Natural England [2025] EWHC 2761 (Admin) provides detailed guidance on when courts may vary Aarhus Convention costs caps under CPR 46.27, establishing that objective unreasonableness operates as a freestanding protection even where increased costs are real-world affordable for claimants.

Background

The case involved a judicial review claim brought by two environmental non-governmental organisations, The Badger Trust and Wild Justice, against Natural England. The claim challenged a decision made on 3 May 2024 to issue or renew 26 supplementary badger cull licences, authorising the killing of badgers between 1 June 2024 and 30 November 2024 [§3]. The Interested Party was the Secretary of State for Environment, Food and Rural Affairs. Permission for judicial review was granted by Fordham J at an oral renewal hearing on 15 May 2025 [§3], with a two-day substantive hearing scheduled for December 2025 [§3].

The case was recognised as an Aarhus Convention claim, engaging the costs protection provisions of CPR Part 46 Section IX [§20]. The default costs caps under CPR 46.26 were therefore applicable, limiting the claimants’ potential costs liability to £10,000 each and the defendant’s liability to £35,000 [§22]. Natural England subsequently applied for a variation of these caps under CPR 46.27, seeking to increase the claimants’ caps to £20,000 for Wild Justice and £30,000 for Badger Trust [§58].

The hearing before Fordham J on 16 October 2025 dealt with two distinct applications: Natural England’s application for redaction of certain decision-making documents, and its application to vary the Aarhus costs caps [§1, §7]. Judgment was handed down on 28 October 2025 [title page].

Costs Issues Before the Court

The primary costs issue for determination was Natural England’s application under CPR 46.27 to vary the default Aarhus Convention costs caps [§17]. The application required the court to consider whether increasing the caps would make the costs of the proceedings prohibitively expensive for the claimants, applying the two-limb test set out in CPR 46.27(3) [§23]. The court had to analyse both whether likely costs exceeded the claimants’ financial resources (Limb (a)) [§§29-33] and whether the likely costs were objectively unreasonable (Limb (b)) [§§34-44], having regard to the specific mandatory factors listed in the rule. A secondary costs issue concerned the allocation of costs for the redactions application and the variation application itself [§§62-64].

The Parties’ Positions

Natural England, represented by Paul Luckhurst and Sean Butler, contended that the default £10,000 caps should be increased to £20,000 for Wild Justice and £30,000 for Badger Trust [§58]. They argued this represented a fairer balance, producing a total potential recovery of £50,000 if successful [§58]. Their submissions emphasised that the claimants had real-world affordability, pointing to Wild Justice’s cash reserves of £57,576 (as at 8 October 2025) [§47] and Badger Trust’s reserves of approximately £326,000 (as at 31 December 2024) [§48]. They noted the claimants’ successful crowdfunding campaign which raised £57,180 against a target of £52,486 [§55], suggesting further fundraising was possible. Natural England also highlighted the backward-looking nature of the claim and current government policy favouring curtailed culling, suggesting limited environmental importance [§58].

The Claimants, represented by David Wolfe KC and Barney McCay, opposed the variation. They characterised the default Rule 26 caps as a carefully considered balance struck by the rule-maker, not merely a starting point [§§25-26]. They submitted that even if real-world affordability could be demonstrated (Limb (a)), the increase sought was objectively unreasonable under Limb (b) [§45]. They emphasised the public interest imperative in facilitating access to environmental justice and the need for environmental NGOs to function as repeat players [§56]. Witness evidence indicated both claimants would reluctantly withdraw their claim if faced with a materially increased cap, demonstrating the chilling effect such a variation would have [§§47-48]. They contended that the claim had a reasonable prospect of success, involved important environmental issues, and was a paradigm environmental protection case undiluted by private economic interests [§§50, 52-53].

The Court’s Decision

Fordham J refused Natural England’s application to vary the costs caps [§62]. He held that even assuming the claimants could real-world afford the increased caps (Limb (a)), Natural England had failed to demonstrate that the increase would not be objectively unreasonable (Limb (b)) [§45].

The Legal Framework: Rule 26 Caps as More Than Placeholders

The court provided significant analysis of the legal framework, characterising the Rule 26 default caps (£5,000 for individuals, £10,000 for organisations) as more than mere placeholders [§26]. They were described as representing a “normal” and “general” position [§§25-26], chosen by the rule-maker on a principled basis to facilitate access to environmental justice while minimising satellite litigation [§26]. The caps were said to constitute a “soft presumption” [§26], providing clear signalling to avoid chilling effects [§27]. The court emphasised the onus on any party seeking variation to clearly demonstrate its appropriateness [§§25-26].

The Two-Limb Test for Prohibitive Expensiveness

Fordham J provided detailed guidance on the meaning of “prohibitively expensive” under CPR 46.27(3), explaining that it comprises two independent bases [§§29-44]:

Limb (a): Real-World Affordability (§§29-33)

The court found this limb involves a means test focusing on the claimant’s actual financial resources and practical ability to pay [§§30-31], having regard to any third-party financial support under CPR 46.27(4) [§29]. This is about whether likely costs exceed the claimant’s financial resources in CPR 46.27(3)(a). The judge explained this is “really a kind of means test” [§30], concerned with “real-world unaffordability of the actual case for the actual claimant, in light of the money which the claimant has or can access” [§30]. Money in the bank does not automatically equal practical ability to pay if needed for essential purposes [§31].

Limb (b): Objective Unreasonableness (§§34-44)

The court clarified this operates as a freestanding protection even where costs are real-world affordable [§35]. Limb (b) is “a second way to protect a claimant for whom the proceedings are real-world affordable” [§35]. It establishes an objective standard of reasonableness to promote access to environmental justice [§34], assessed by reference to the six mandatory factors in CPR 46.27(3)(b): (i) the situation of the parties; (ii) reasonable prospect of success; (iii) importance for the claimant; (iv) importance for the environment; (v) complexity; and (vi) whether frivolous [§34].

Fordham J emphasised that “real-world affordability cannot drive a conclusion of objective reasonableness” as “that would subvert the rule and undermine the public interest aims” [§43]. The question is not affordability but reasonableness [§38], informed by the facilitative purpose in paradigm environmental protection cases [§§37-38].

Application to the Facts

Applying these principles, Fordham J found the variation objectively unreasonable because [§§46-57]:

      • The court held that the claim had a reasonable prospect of success, having crossed the permission threshold despite Natural England’s resistance [§50]
      • The court found the issues were important both for the claimants and “for the environment” under CPR 46.27(3)(b)(iv), involving an environmental protection case with backward-looking legal audit value [§52]
      • The court characterised the case as representing undiluted environmental protection without “individual economic interests” or mixed purposes [§53], distinguishing it from the CPRE case where local property owners funded the challenge [§53]
      • The claimants’ crowdfunding and legal arrangements (discounted rates, specialist lawyers) were eminently reasonable and could not be criticised [§55]
      • Increased caps would undermine their capacity to function as repeat players in future environmental litigation, and “space to be a repeat player” is essential for proper access to environmental justice [§56]
      • The existing caps already represented a doubling of protection due to two claimants being involved under CPR 46.26(4) [§51]
      • Natural England as a public authority with a £350m annual budget and £2.32m legal budget must accept practical implications of legal audits and irrecoverable costs [§54]

A Warning About Financial Scrutiny

Fordham J added pointed observations about the nature of Natural England’s application [§§60-61]. He noted that the claimants’ accounts, reserves policies, and fundraising arrangements had been subjected to “close scrutiny” during a “considerable portion of a 3-hour hearing“. While acknowledging this was permitted by the CPR 46.27 mechanism, the judge expressed concern that “the court room during this hearing would, I think, have been a chilling place for responsible environmental NGOs, contemplating viable environmental protection judicial review claims” [§61]. He concluded: “it was particularly appropriate that the Court should respond as robustly, straightforwardly and clearly as it legitimately could” [§61].

Orders Made

The court ordered [§§62-64]:

      • The variation application was dismissed [§64]
      • Natural England must pay the claimants’ costs of the variation application on the standard basis, to be assessed if not agreed [§64]
      • The costs of the redactions application were ordered to be the Claimants’ costs in the case [§64]
      • Confidential versions of certain decision-making documents were to be filed, with tailored restrictions requiring any press or public application for access to trigger notice to Natural England and a right to be heard [§§12-15]

Key Takeaway

This decision establishes that Aarhus Convention costs cap variations under CPR 46.27 must satisfy a rigorous two-limb test, with objective unreasonableness operating as an independent protection even where claimants can afford increased costs. Courts will scrutinise applications closely in paradigm environmental protection cases, recognising the need for environmental NGOs to function as repeat players and the chilling effect that detailed financial scrutiny can have on access to environmental justice.

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Background

The case involved an appeal by HM Treasury and the Secretary of State for Business and Trade against a decision by Lang J that a judicial review claim brought by Global Feedback Limited (“GFL”) was an “Aarhus Convention claim” under CPR 46.24(2)(a), thereby attracting costs protection. The underlying claim challenged the legality of the Customs Tariff (Preferential Trade Arrangements and Tariff Quotas) (Australia) (Amendment) Regulations 2023, which implemented tariff preferences under a UK-Australia Free Trade Agreement. GFL, an environmental charity, argued these regulations would increase greenhouse gas emissions through “carbon leakage” from increased Australian beef production. The key costs issue was whether the claim fell within Article 9(3) of the Aarhus Convention as involving a challenge to acts contravening “provisions of national law relating to the environment”.

Costs Issues Before the Court

The central costs issue was whether the judicial review qualified as an Aarhus Convention claim under CPR 46, which would impose costs limits protecting GFL. This turned on whether the challenged decisions allegedly contravened provisions of UK law “relating to the environment” under Article 9(3). The appellants argued the Taxation (Cross-Border Trade) Act 2018 (under which the regulations were made) was not environmental legislation, while GFL relied particularly on section 28 requiring regard for international obligations including climate agreements.

The Parties’ Positions

The appellants contended Article 9(3) only applied where the contravened law’s purpose was environmental protection or regulation. They argued the 2018 Act concerned import duties, not the environment, and section 28 was a general provision requiring regard for relevant international obligations without specifying environmental aims. They distinguished Venn by arguing the planning context was unique in implementing environmental protection through policy.

GFL submitted that section 28’s requirement to consider UN climate agreements meant the claim involved contravention of national law relating to the environment. They argued this was analogous to Venn, where policies formed part of the environmental legal framework. The intervener WWF took a broader view that any law capable of affecting the environment engaged Article 9(3).

The Court’s Decision

The Court of Appeal allowed the appeal, holding the claim was not an Aarhus Convention claim. It analysed Article 9(3)’s language, confirming “relating to” required the national law’s purpose to be environmental protection or regulation. The travaux préparatoires and French text supported this interpretation, showing the original “national environmental law” wording was maintained in substance.

The Court distinguished Venn, noting planning legislation uniquely implemented environmental protection through policy. Section 28 of the 2018 Act was a general provision without environmental purpose. Mere public law errors concerning environmental effects did not engage Article 9(3) unless the contravened law itself had environmental aims. The Court disapproved the broader approach in Friends of the Earth, emphasising the need to focus on the purpose of the legal provision allegedly contravened rather than the decision’s environmental impacts.

As the 2018 Act’s provisions were not for environmental protection, and section 28 did not specifically require environmental considerations, the claim fell outside Article 9(3). Costs protection under CPR 46 therefore did not apply, though GFL could seek a costs protection order under alternative provisions.

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