Balancing Costs in Judicial Review: Discretionary Framework Established in McShane v Data Protection Commissioner [No. 2]

Introduction

McShane v Data Protection Commissioner [No. 2] ([2025] IEHC 314) is a High Court judgment on the allocation of costs in judicial review. The applicant, Eamon McShane, challenged a decision of the Data Protection Commissioner (“DPC”) regarding the handling of his personal data by the Health Service Executive (“HSE”), which participated as a notice party. Having been granted leave to apply for judicial review but ultimately losing on all grounds, the applicant sought a “small” costs award, while both the DPC and the HSE claimed full costs. Mr. Justice Barry O’Donnell’s decision clarifies how the court exercises its discretion on costs at the leave stage and the substantive hearing, and addresses the role of public-interest considerations and the position of a notice party.

Summary of the Judgment

  • The court found that, although the DPC and HSE contested the leave application and thereby increased its costs, it would not fix those costs on the applicant. No order for costs is made in respect of the contested leave application.
  • On the substantive judicial review, the applicant failed on every ground. The ordinary rule that “costs follow the event” applies: the DPC and HSE are entitled to their costs from the date leave was granted (3 November 2023), to be assessed in default of agreement.
  • The applicant’s public-interest arguments and critique of the DPC’s processes did not reach the threshold of exceptional circumstances that would displace the normal costs rule.
  • The HSE, joined as a notice party at the applicant’s invitation, is entitled to its costs on the same basis as the primary respondent.

Analysis

1. Precedents Cited

  • Legal Services Regulation Act 2015, ss. 168–169: establish the general power to order costs, apportion costs, and the entitlement of a wholly successful party to recover costs unless the court orders otherwise.
  • Order 99 RSC (as recast in 2019): mandates that interlocutory applications normally attract a costs order unless justice requires otherwise.
  • Treasury Holdings v NAMA [2012] IEHC 237: the court may make an “immediate” costs order in relation to contested leave if contesting the leave application adds materially to costs.
  • Veolia Water UK plc v Fingal County Council (No. 2) [2007] 2 IR 81: costs consequences of raising additional issues only arise if they materially affect overall litigation costs.
  • Word Perfect Translation Services Ltd v Minister for Public Expenditure and Reform [2023] IECA 189: the court should focus on the “big picture” rather than nit-picking every sub-issue in costs assessment.
  • O’Connor v Nenagh UDC [2002] IESC 42 (and Dowling v Minister for Finance [2023] IECA 197): the presumptive position that both respondent and notice party recover costs unless exceptional reasons justify a different order.
  • Little v Chief Appeals Officer [2024] IESC 53: the narrow exceptional circumstances in which a public-interest litigant may be granted relief from adverse costs.

2. Legal Reasoning

The court divided its costs analysis into two phases: the leave application stage and the substantive hearing.

a. Leave Application Costs

Although the leave application proceeded on notice and was contested by both the DPC and HSE, the judge inferred from the reserve-to-trial approach taken by Bolger J. that the costs would likely follow the event. In fairness, however, it would be inequitable to saddle the applicant with the extra costs of an unsuccessful contest at the leave stage. The low threshold for leave means contesting it will often fail. To deter unnecessary contests would undermine an applicant’s right to challenge public-law decisions. The judge therefore exercised discretion to make no costs order at the leave stage.

b. Substantive Costs

The applicant failed comprehensively on all grounds. The court applied section 169(1) of the 2015 Act: an entirely unsuccessful party normally pays the costs of those who succeed. The applicant’s alternate-remedy argument lost only because of the way the DPC’s decision was framed, not because the principle was unsound, and in any event did not materially prolong the hearing. Criticisms of the DPC’s process were peripheral to the granted grounds. The judge rejected the applicant’s invitation to dissect every line item of cost.

c. Public-Interest Exception

Drawing on Little v Chief Appeals Officer, the court confirmed that relief from adverse costs in public-interest cases is reserved for truly exceptional circumstances—cases of constitutional novelty, fundamental rights, or issues of far-reaching importance not previously explored. This case involved a fact-specific data-protection complaint for personal gain; it did not clear the high bar for public-interest cost immunity.

d. Notice Party’s Costs

By inviting the HSE to be joined, the applicant assumed the risk of adverse costs. Under O’Connor v Nenagh, the HSE was a necessary, successful, innocent party, fully participating in good faith. No compelling reason existed to deny it costs. Accordingly, the HSE recovers its costs as of the leave-grant date.

3. Impact

  • Contesting Leave Applications—potential respondents should carefully weigh whether to contest leave, since a failed contest may increase costs yet yield no immediate costs order in their favor.
  • Reserve-to-Trial Practice—reserving leave-stage costs remains the norm, but courts retain discretion to depart from it in appropriate cases.
  • Public-Interest Litigation—unsuccessful applicants cannot assume cost immunity outside clear cases of novel or fundamental public-law questions.
  • Notice Parties—parties joined at the applicant’s invitation remain exposed to costs risk if they engage fully but ultimately lose.

Complex Concepts Simplified

Judicial Review Leave Application
A preliminary hurdle in judicial review: applicants must obtain the court’s permission (“leave”) to argue their case. If contested, costs can be reserved until the final hearing.
Reserve to the Event
A procedural order that postpones decision on costs until the main issue is decided, so that costs “follow the event” of success or failure.
Public-Interest Exception
A narrow rule allowing unsuccessful litigants who raise novel or fundamental public-law issues to avoid adverse costs, reserved for exceptional cases.
Notice Party
A third party invited into judicial review proceedings to present relevant context or evidence. Although not the principal respondent, a notice party can recover costs if it succeeds.

Conclusion

McShane v Data Protection Commissioner [No. 2] provides clear guidance on judicial-review costs in Ireland. It reaffirms that:

  • Costs of a contested leave application are normally reserved and follow the outcome unless fairness demands otherwise.
  • Unsuccessful applicants generally pay the costs of both respondent and notice party from the date leave is granted.
  • Public-interest cost immunity is confined to truly exceptional, precedent-setting cases.
  • Notice parties invited by applicants assume the usual costs risks of litigation.

This judgment will guide practitioners and courts in balancing access to justice with the responsible litigation of public-law disputes.