It’s a basic cornerstone of our legal system that each party to a Planning Appeal bears its own costs and legal expenses. As we all know, however, there are a number of exceptions to every rule. And one of those is that an application for costs may be made where one party has behaved or acted unreasonably.

The fundamental rule is that any application for costs can be made to the Planning Inspector, or potentially to the Secretary of State. Because of immediacy and ease of applying, it is more usual that the Planning Inspector is the initial recipient of any costs application, upon appeal.

Of course, there are certain criteria that must be considered, when contemplating any application for costs. Firstly, it should normally be shown that the unreasonable behaviour caused another party to incur unnecessary expense. Otherwise, the costs award would be punitive, rather than compensatory, which is the general principle. Equally, any determination by the Court may be for the whole or a part of the costs, the subject of the application. In this regard, the Court may decide on the facts what is allowable and what should be rejected.

Moreover, this rule applies to all planning appeals, whether determined by written submissions, a hearing or an inquiry. Having said that, the cases most commonly heard are appeals against the refusal of planning permission, or the issue of an enforcement notice.

In order for the application to succeed, three conditions must be satisfied, as follows:
(i) Application for costs must have been made at the appropriate time
(ii) A party must have behaved unreasonably
(iii) The unreasonable behaviour must have caused the applicant for costs to have incurred or wasted expense unreasonably

This latter condition is the basis upon which the whole application will fail or succeed. Namely, that there must have been a quantifiable loss, suffered by one of the parties.

Of course, one of the questions the parties will doubtless raise is, “what constitutes unreasonable behaviour”? As such, I have compiled a very much non-exhaustive list of examples and pitfalls to consider:

(i) Failure to attend a hearing or a site visit
(ii) Conduct of the proceedings
(iii) Inability to produce evidence in support of a refusal of planning permission
(iv) Appellant pursuing an appeal upon grounds which are clearly ‘no hopers’
(v) Withdrawal of one or more reasons without good reason for refusal of planning permission after the appeal has been made
(vi) If the Inquiry has had to be adjourned or unreasonably prolonged or cancelled, resulting in unnecessary or wasted expense

In relation to the manner in which the application is made, it must state why it is considered that the other party has acted unreasonably, and furthermore how this has caused unnecessary or wasted expense. Notice must be given to the other party, and the case officer provided with an advanced statement of the grounds of the application, or a written skeleton argument.

It remains good practice to submit the application prior to the hearing or Inquiry, although the grounds may be amended on the day if necessary. It goes without saying that the grounds for a costs application should be made clear by the time of the other party’s statement of case, and at the very latest by the time written exchanges are completed.

The power to award costs in Planning Appeals is contained in s.250(5) of the Local Government Act 1972, which states:

The Minister causing an Inquiry to be held under this section may make orders as to the costs of the parties at the Inquiry and as to the parties by whom the costs are to be paid and every such order may be made a rule of the High Court on the application of any party named in the order.

As a consequence, if either party wishes to have the costs assessed by a Costs Judge or a costs officer, the order must be made an order (rather than a ‘rule’) of the High Court. An assessment takes place in the Senior Courts Costs Office, but the application for the conversion of the Inspector’s order into a High Court order is made to the Administrative Court Office of the High Court at Royal Courts of Justice, Strand, London WC2A 2LL.

Most importantly interest on the costs can only run from the date of the High Court Order. It must be noted that it does not and cannot run from the date of the Inspector’s order, because such an order does not qualify as an order under the Judgments Act 1838 s.17.

As a matter of practice, there is no overriding obligation to have the order for costs made an order of the High Court. Indeed, the parties may be able to agree the costs, but if there is a dispute about the quantum and assessment is required, the order should be made an Order of the High Court. This tactic would enable a formal assessment to take place in the SCCO, so that interest may then run on the costs (at 8%) from the date of the High Court Order.

Michael Bacon
Company Founder
A&M Bacon Limited