Protective Costs Orders considered for the first time in Bermuda Courts
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The 2014 matter involving the Bermuda Environmental Sustainability Task Force (“BEST”) and the Minister of Home Affairs [2014] SC (Bda) 73 App (18 September 2014) raised interesting legal points as it relates to environment and planning law. The substantive matter is discussed in a further article by my colleague Jessica Kemmenoe in another post.
However, a potentially obscure point was also raised in this case, which provides guidance as it relates to costs orders, namely the making of protective costs orders (“PCO”) in Bermuda.
In litigation, it is standard practice for a “losing” party in an action to be responsible for the costs (or a portion) of the winner. In this instance the Court was aware of BEST’s not-for-profit status and limited financial means and was considering how to assist them when balancing the scales of justice.
The issue in consideration for the Court was whether BEST (a Bermuda charity and not-for profit entity) ought to be protected, due to the public interest of this case, from the usual costs consequences in the event their appeal failed.
By definition, a PCO as noted by Philip Havers QC in the article Protective Costs Order – fair play in action or a complainant’s charter? is an “Order made at the outset of the proceedings in question which provides that the party applying for the Order shall, regardless of the outcome of the proceedings, either not be liable at all for the other party’s costs or be liable only for a fixed proportion thereof but if successful may be entitled to recover all or part of his costs from the other party”.
It was noted by Bermuda’s Honourable Chief Justice, Dr. Ian Kawaley, that before this particular matter, PCOs had not been considered in Bermuda.
As such, the Court did not have any local authority to refer to and had to be guided by English authorities on the issue; such guidance coming from the English Court of Appeal case R (Corner House) v Trade and Industry Secretary [2005] 1 WLR 2600.
The court did note that while the Corner House authority would provide a framework, the Court would not be bound by an inflexible framework. Such an approach to using the Corner House guidelines flexibly has been noted in subsequent authorities.
The Court’s considerations in determining to make a PCO were as follows:
- Are the issues raised of public important and is it in the public interest that they be resolved?
- Having regard to the financial resources of the parties, and the likely costs, is it fair and reasonable to make a PCO?
- Would the applicant discontinue the proceedings if the PCO were not granted?
After hearing reasoned argument from Counsel, the Court determined that a PCO should be granted in BEST’s favour wherein their costs were capped at $75,000.00 should they be successful on the appeal. Conversely, the Court also ordered that BEST would not be liable for the costs of the Respondent, if their appeal was dismissed, as they would be protected. It remains to be seen, however, how the Court will consider PCOs going forward but undoubtedly, the BEST judgment will provide guidance for other parties in the future.