Reaffirming the Corner House Criteria for Protective Expenses Orders: Refusal in Keatings v Advocate General for Scotland

Introduction

The case of Martin James Keatings v Advocate General for Scotland and Others ([2013] ScotCS CSIH_70) presented before the Scottish Court of Session on July 30, 2020, addresses the pivotal issue of legislative competence and financial liability in legal proceedings. Martin James Keatings, the pursuer, sought a Protective Expenses Order (PEO) to cap his liability for legal costs in an action challenging the Scottish Parliament's authority to hold an independence referendum without UK government consent or amendments to the Scotland Act 1998. The defendants included the Advocate General for Scotland, the Lord Advocate, and Scottish Ministers. This commentary delves into the court's comprehensive analysis, the application of legal precedents, and the broader implications for future litigation involving public interest and financial risk.

Summary of the Judgment

The court was tasked with determining whether to grant Keatings' motion for a PEO, which sought to limit his financial liability for legal expenses to a mere £5,000, while capping the defenders' liability to £90,000 in total. The court meticulously evaluated the application against the established Corner House criteria, which assess the fairness and public interest in granting such orders. Despite acknowledging that the case raised issues of general public importance, the court ultimately refused the PEO. This decision was grounded in the finding that not all Corner House criteria were satisfied, particularly the necessity of resolving the public interest issue within the proceedings and the applicant's indirect financial interest through crowdfunding.

Analysis

Precedents Cited

The judgment extensively referenced key legal precedents to substantiate the decision:

Newton Mearns Residents Flood Prevention Group for Cheviot Drive v East Renfrewshire Council [2013] CSIH 70: This case provided a critical analysis of the court's jurisdiction to grant PEOs at common law, emphasizing the necessity of fairness and public interest.
R (Corner House Research) v Secretary of State for Trade and Industry 2005 1 WLR 2600: Established the five Corner House criteria for granting PEOs, focusing on prospects of success, public importance, absence of private interest, fairness in financial considerations, and the likelihood of discontinuing proceedings without a PEO.
Wightman v Advocate General for Scotland 2018 SC 388: Clarified the "real prospect of success" criterion, emphasizing that the prospect must be substantive and not merely arguable.
Gibson v Scottish Ministers 2016 SC 454: Provided comparative insight into expense estimates in public law actions, reinforcing the need for fair and reasonable cost assessments.
Other cases like McGinty v Scottish Ministers 2014 SC 81 and The Scotch Whisky Association and Others [2012] CSOH 156 were also discussed to illustrate the flexibility and varied forms of PEOs.

Legal Reasoning

The court's legal reasoning was meticulously structured around the Corner House criteria:

Real Prospects of Success: The court acknowledged that the case surpassed the threshold of having real prospects of success, meaning there was substance beyond a mere arguable position.
Public Importance: While the issue of legislative power for a Scottish independence referendum was deemed of general public importance, the court found that the public interest did not necessitate resolving this issue within the current proceedings.
Private Interest: The pursuer's indirect financial interest, facilitated through crowdfunding, indicated a private vested interest, which complicated the granting of a PEO.
Fairness and Financial Considerations: Despite the pursuer's limited personal financial resources, the accessibility of crowdfunding meant that significant legal expenses could be covered without undue burden on public funds.
Likelihood of Discontinuing Proceedings: The pursuer's ongoing ability to raise funds suggested that refusal of a PEO would not lead to discontinuation of the action.

The court emphasized that the Corner House criteria must be collectively satisfied to justify a PEO. In this case, while some criteria were met, critical ones remained unmet, leading to the refusal of the PEO.

Impact

This judgment reinforces the stringent application of Corner House criteria in granting PEOs at common law. It underscores the necessity for not only demonstrating public importance and a real prospect of success but also ensuring that the financial mechanisms do not obviate the need for a PEO. The refusal serves as a precedent that even when issues are of high public interest, the procedural appropriateness and financial transparency of the applicant play crucial roles in such determinations.

Future litigants seeking PEOs must carefully consider these factors, especially regarding their financial backing and the procedural context of their applications. Additionally, this case highlights the judiciary's commitment to maintaining a balance between facilitating access to justice and safeguarding public funds from undue financial risks.

Complex Concepts Simplified

Protective Expenses Order (PEO)

A PEO is a legal mechanism that limits the amount of financial liability a party (usually the applicant) can face regarding legal costs in litigation. It is particularly relevant in cases of public interest where the financial risk of losing could deter individuals or groups from pursuing important legal actions.

Corner House Criteria

These are five conditions established in the case of R (Corner House Research) v Secretary of State for Trade and Industry that courts must evaluate when deciding whether to grant a PEO. They assess factors like the likelihood of the applicant's success, the public importance of the issues, absence of personal financial gain, fairness in financial considerations, and the possibility of discontinuing proceedings without a PEO.

Real Prospects of Success

This criterion requires that the applicant's case has substantive grounds and is more than merely arguable. It ensures that PEOs are not granted to cases that lack merit.

Public Interest Requirement

For a PEO to be granted, the issues at stake must not only be of general public importance but also necessitate resolution within the specific legal proceedings. This prevents courts from being burdened with abstract or hypothetical disputes.

Conclusion

The refusal of Martin James Keatings' motion for a Protective Expenses Order reaffirms the rigorous application of the Corner House criteria in safeguarding the judicial system's financial integrity. While the case underscored the significance of the issues raised, it also highlighted the importance of procedural appropriateness and financial transparency. This judgment serves as a crucial reference point for future litigants and legal practitioners, emphasizing that public interest alone does not guarantee financial protections in legal proceedings. Instead, a holistic evaluation of all Corner House criteria is essential to ensure that PEOs are granted judiciously, balancing access to justice with prudent financial oversight.