Costs in Public Interest and Constitutional Litigation
Trustees for the time being of the Biowatch Trust v Registrar Genetic Resources and Others (CCT 80/08) [2009] ZACC 14 (3 June 2009) The Constitutional Court of South Africa has confirmed that the general rule for an award of costs in constitutional litigation between a private party and the state is that if the private party is successful, it should have its costs paid by the state, and if unsuccessful, each party should pay its own costs.
The litigation must raise a genuine constitutional issue and any perceived ‘misconduct’ on the part of the applicant would need to be of such a compelling kind to justify a departure from the general rule. The Court held that the over-arching principle is not to discourage the pursuit of constitutional claims.
Facts
The Biowatch Trust, an environmental watchdog, brought an application to challenge the validity of a government agency’s refusal to provide information regarding the genetic modification of organic material. Biowatch argued that the Registrar for Genetic Resources’ failure to grant access to the information constituted an infringement of its rights to information in relation to constitutionally-protected environmental interests.
Biowatch was substantially successful in its claim and the High Court held that the Registrar had failed in its constitutional and statutory duties to provide the requested information. Despite this finding, the High Court was disapproving of the manner in which the requests for information were formulated and the relief claimed in the notice of motion. To mark its displeasure, no costs order was made against the governmental body in favour of Biowatch.
Another costs decision, the subject of this same appeal, involved Monsanto SA (Pty) Ltd, a company involved in biotechnology research. Monsanto intervened in the litigation to prevent Biowatch from having access to confidential information it had supplied the Registrar. Even though Biowatch obtained the information, the High Court ordered that Biowatch pay Monsanto’s costs (as well as its own) because of its supposed ‘inept requests for information’.
As a result of the controversy with the costs decisions and the anticipated ‘chilling effect’ they would have on public interest litigation, three public interest NGOs were granted the status of amici to assist the Court. The amici argued that the High Court misdirected itself in failing to give sufficient regard to the fact that Biowatch was a public interest NGO litigating not in its own behalf, but in the public interest.
Decision
General rule
The Court reaffirmed the general rule established in Affordable Medicines [2005] ZACC 3 that where a private party is seeking to assert a constitutional right and is successful, the government should pay the costs of that private party. If the private party is unsuccessful, each party should bear its own costs. The Court held that the rationale for this rule is three-fold:
- it diminishes the ‘chilling effect’ that adverse costs orders have on parties with meritorious claims seeking to assert constitutional rights;
- it recognises the inherent public interest in constitutional litigation, since the outcome will affect the rights of all those in similar situations; and
- it acknowledges the state’s primary responsibility for ensuring that both the law and state conduct are consistent with the Constitution.
The Court confirmed that this general rule is not unqualified. For example, an applicant with a frivolous or vexatious claim should not expect that the worthiness of its cause will immunise it against an adverse costs award.
Application of general rule
The Court held that in determining whether to apply the general rule for costs in constitutional litigation, the following issues should be considered:
- whether the litigation raises genuine and substantive constitutional issues – will a costs order hinder or promote the advancement of constitutional justice?
- the character of the litigation and not the nature of the parties or the causes they advance, such as their private or public interests (Affordable Medicines);
- the extent of public controversy in the outcome of the litigation. The greater the public controversy, the greater need for transparency and commitment to the principles of the Constitution;
- the presence of public interest groups and acknowledgement that they play a vital role in the development of the Court’s jurisprudence but they will not be granted a privileged status simply because they are acting in the public interest or happen to be indigent.
The Court held that the general rule does not ordinarily extend to constitutional litigation between private parties, but may be applicable if the parties raise important constitutional issues. Constitutional issues are more likely to arise in litigation where the state is required to perform a regulatory role, in the public interest, between competing private parties.
Outcome
The Court held that Biowatch raised important constitutional issues in terms of the rights to information and environmental justice and achieved substantial success in its meritorious claim. The ‘misconduct’ of Biowatch in the manner it requested the information would need to have been compelling to justify a departure from the general rule, and in this case, the Court held it was not. The manner in which the High Court chose to demonstrate its disapproval was held to be ‘demonstrably inappropriate… and unduly chilling to constitutional litigation’.
As such, the appeal was upheld and the governmental authority was ordered to pay the costs incurred by Biowatch in the High Court and in this Court. In addition, the order of the High Court requiring the applicant to pay Monsanto’s costs was set aside and no costs order was made in this respect.
Relevance to the Victorian Charter
This case demonstrates the significance of the issue of costs to access to justice, the rule of law and the vindication of the public interest.
In Victoria and throughout Australia, unlike in South Africa, there is no general public interest exception to the rule that costs follow the event. PILCH has observed that many meritorious public interest matters are not ultimately pursued due to the risk of an adverse costs order. In this way, costs rules are a disincentive to public interest litigation, particularly for marginalised and disadvantaged people.
Courts in other jurisdictions have been prepared to make orders protecting public interest litigants against adverse costs orders. The orders are described as ‘protective costs orders’ (PCOs) and may include orders that: a party will not be exposed to an order for costs if it loses at trial; the amount of costs that a party will be required to pay if it loses at trial will be capped at a certain amount; or there will be no order for costs whatever the outcome of the trial.
This case may form useful obiter for courts in determining costs in cases involving the protection of fundamental and quasi-constitutional rights and freedoms, such as those enshrined in the Victorian Charter. In addition, Australian courts may interpret this decision broadly to challenges under other Acts which involve regulation by government authorities, such as the Freedom of Information Act 1982 (Cth).
The decision is available at http://www.saflii.org/za/cases/ZACC/2009/14.html.
Libby Penman is on secondment to the Public Interest Law Clearing House (Vic) from Freehills