The appellant appealed against a decision ( EWHC 1851 (Admin),  1 W.L.R. 4424) refusing his application for a protective costs order.
In February 2014, the appellant had been charged with seven terrorism offences. In March 2014, he was made subject to a designation order under the Terrorist Asset-Freezing etc. Act 2010 s.2(1). In October 2014, the CPS announced that it would no longer proceed with the prosecution against him. His solicitors invited the Treasury to quash the designation ab initio on the basis that he had never met the criteria for designation because he had never been involved in terrorism. The Treasury stated that it had decided merely to revoke the designation; it gave no reasons for its refusal to quash it. The appellant appealed against the refusal to quash the designation pursuant to s.26 of the 2010 Act. At a directions hearing, he sought a protective costs order. However, although the judge considered that such an order might be appropriate, he found that it would be premature to make an order. He set out four “strict conditions” that had to be met if an order were to be made: the case had to be of real benefit to the person bringing it; that person had to be unable to assess the prospects of success in the ordinary way; having regard to his financial resources and the amount of costs likely to be involved, it was fair and just to make the order; further, if the order was not made, the person would probably discontinue the proceedings and would be acting reasonably in doing so. The judge found that the second condition of being unable to assess the prospects of success was not yet met. He stated that the appropriate point to consider whether the second condition was satisfied was once the Treasury had served its evidence, including any “gisting” of the closed material on which it intended to rely.
HELD: It was common ground that the judge had been right to decide that (a) a protective costs order could in principle be made where an individual who brought a claim had been accused of terrorism and reliance was placed on closed evidence, rendering it impossible for him to determine the merits of his claim, and (b) in such a case, an order should only be made if the four conditions he had identified were met. However, he had been wrong to conclude that the appropriate time to consider whether the second condition was satisfied was once the Treasury had served its evidence. It was a striking feature of the case that the Treasury was likely to be relying on closed material in defending the appeal. In those circumstances, it was impossible for the appellant to be properly advised as to his prospects of success at this stage. The judge’s decision meant that the appellant was being required to embark on an appeal without the protection of a protective costs order at least until the Treasury had served its evidence, including any gisting of the closed material. That was the very kind of unfairness that the recognition that protective costs orders might, in principle, be appropriate in this kind of case was designed to overcome. The matter would be remitted to the High Court so that it could decide whether the first, third and fourth conditions were met (see paras 19, 27, 34 of judgment).