In the great Morecambe & Wise piano concerto sketch, Eric Morecambe famously tells conductor André Previn (or Mr Preview, as he called him) that he’s "playing all the right notes, but not necessarily in the right order.”
There are parallels between this classic sketch and the process of judicial review (no, really!). The system is used when it is believed that a decision by a public body has been made correctly, but not necessarily in the right manner.
In the planning process, judicial reviews are often used in an attempt to modify or overturn a decision made by the local authority about an intended development. This may be due to the belief that the local authority, in coming to a decision, did not do so “in the right order” or may have missed something altogether.
This is where things can go wrong for developers. After work commences, there is a risk that a successful judicial review application could halt work or force changes to be made. This is likely to result in additional costs to the developer, and leave them potentially unable to repay the lender.
Recognising the threat that judicial reviews pose to developments, the Government outlined plans in 2012 to overhaul the system to help boost growth and speed up development. This resulted in changes to the Civil Procedure Rules which govern the process. These changes were implemented with effect from July 2013; the most notable of these was the reduction in the time limit for applications to be submitted, from three months to, seemingly, just six weeks after planning is granted.
However, although reducing the window for judicial review applications seemed a positive move, it wasn’t quite as simple as that. Previously, there were clearly defined rules for when an application should be submitted, i.e. “promptly and no later than three months after the grounds to make a claim first arose.”
Now, the rules are more subjective and state that a claim should be brought within six weeks of when the claimant “knew or ought to have known” of the grounds for a claim. Unfortunately, this rather vague definition has inadvertently created uncertainty for developers, and in some cases has meant the application period is longer than it was before.
More recently, the Ministry of Justice has been exploring the potential for further reform to the judicial review process, and has put a number of proposals to the Government.
In February 2014, the Ministry of Justice published the Government’s response to these proposals, which indicated that further changes will be made. The changes are mainly to prevent objectors misusing the system to object and cause delays to development, and they include:
The date these changes will be implemented is yet to be confirmed. When applied, they’ll help to tighten up the judicial review procedures and prevent rogue applications from proceeding, but they will not completely remove the risk posed to developers.
To that end, we continue to provide Judicial Review legal indemnity cover to protect developers and their lenders. The policy covers the cost of participating in a response or defence following a judicial review application being submitted to the Court. If the application is successful and the Court quashes planning consent, the policy also covers a number of losses, such as the expenses involved in complying with a Court order which may require works to be altered or demolished. Abortive professional fees, capital monies and contractual liabilities are also covered.
In addition, we can also extend our policy to include cover for delay costs in the event that a judge awards an interim injunction while the judicial review application is considered, and the developer is forced to temporarily stop works on the site.
So, when you’re next in need of a Judicial Review policy for a developer client, our cover is sure to hit all the right notes (and in the right order!). For further information, please contact our underwriters on 01603 617617 or email firstname.lastname@example.org.