One of the major hurdles that environmental and community groups confront when they decide to take on a corporate or government entity in the legal system is what happens if they lose the case? There is many a fundraiser held around this nation every year for unsuccessful community-based organisations that, having lost a court case to stop a development or prevent something being dug up, cut down or discharged, find themselves facing legal bills of more than $200,000.

A ruling on Wednesday by the New South Wales Land and Environment Court suggests there may be a way to make the legal costs playing field a little more even in such cases by limiting the amount a community or environmental group would have to pay if they did lose their case. But a careful reading of Justice Nicola Pain’s judgment in Blue Mountains Conservation Society v Delta Electricity, that the costs-capping idea is not one that will be available in every case.

The Blue Mountains Conservation Society (BMCS) is your fairly typical non-government environmental group. It’s run essentially by volunteers and is the umbrella group for the Blue Mountains. It runs on the smell of an oily rag. The BMCS is alleging that Delta Electricity has been polluting the Cox’s River near Lithgow and it wants court orders to get it to stop and to clean up any mess they say has been made. Delta denies the claims. Knowing they would be in for a long and expensive fight, the BMCS took the unusual step of asking Justice Pain to rule that even if they lost the case, Delta Electricity would only be able to recover up to $20,000 in legal costs from them.

Justice Pain agreed. Costs in an action such as this, if the case runs all the way to trial, could be more than $200,000 given that it will involve expert evidence, the involvement of big law firms, senior counsel and the like. So the ruling could hurt Delta Electricity’s bottom line.

But Justice Pain’s ruling makes it plain that there are quite a few hoops for environmental and community groups to jump through before they can protect their financial future in this way, while at the same time continue to utilise the legal system to prosecute their cause.

The litigation has to be in the public interest and it helps if the community or environmental group has brought matters to the attention of government before heading to court. Having lawyers act pro bono, and having no pecuniary interest in the outcome of the case, are also relevant factors, as is the issue of the strength of the case.

This decision, if it is followed by other courts, will bring Australia into line with the UK and Canada on capping legal fees. And it might also get governments and corporations talking to environmental and community groups earlier, although the reality is that many litigants who are fighting against community organisations don’t expect to recover all of their costs if they win anyway.

The win by the BMCS represents an innovative attempts by the courts to do what our legislators have repeatedly failed at — making access to justice cheaper for the small player.