Schrems v Data Protection Commission

• Jurisdiction: Ireland
• Judge: Mr. Justice David Barniville
• Judgment Date: 29 September 2022
• Neutral Citation: [2022] IEHC 532
• Court: High Court
• Docket Number: [2020 No. 707 J.R.]

Between

Maximilian Schrems

Applicant

and

Data Protection Commission

Respondent

and

Facebook Ireland Limited

Notice Party

[2022] IEHC 532

[2020 No. 707 J.R.]

[2020 No. 146 COM]

THE HIGH COURT

COMMERCIAL

Costs – Settlement – Public interest – Applicant seeking costs – Whether there should be no order as to costs

Facts: Two sets of proceedings were commenced in the High Court, one by the notice party, Facebook Ireland Ltd (FBI), and the other by the applicant, Mr Schrems. Mr Schrems was a notice party to the proceedings brought by FBI (the Facebook proceedings). In a judgment delivered on 14 May 2021, [2021] IEHC 336 (the Facebook judgment), the High Court (Barniville P) dismissed FBI’s claims in the Facebook proceedings. Orders were made on consent on 20 May 2021, including an order that FBI pay 90% of the costs of the respondent, the Data Protection Commission (DPC), of the Facebook proceedings and all of Mr Schrems’ costs of those proceedings. The proceedings brought by Mr Schrems, had been listed for hearing to commence on 13 January 2021 following the conclusion of the hearing of the Facebook proceedings. Following an exchange of correspondence between Mr Schrems’ solicitors and the DPC’s solicitors between 4 December 2020 and 12 January 2021, Mr Schrems and the DPC agreed to resolve all substantive issues in dispute in the proceedings on certain terms. The parties expressly left over the issue of the costs of the proceedings to be determined by Barniville P once he had delivered judgment in the Facebook proceedings. Subsequent to the delivery of the judgment in the Facebook proceedings on 14 May 2021 and to the making of orders in those proceedings on 20 May 2021, Barniville P directed the exchange of submissions between Mr Schrems and the DPC on the issue of costs and held a hearing on that issue. Mr Schrems sought his costs in full against the DPC on the basis that he had succeeded in obtaining a “substantial part” of the reliefs he was seeking in the proceedings, in accordance with the principles set out by Murray J in his judgment for the Court of Appeal in Hughes v Revenue Commissioners [2021] IECA 5 (Hughes). The DPC contended that there should be no order as to costs, on the basis that Mr Schrems had not obtained the main relief he was seeking in the proceedings, which was an order quashing the DPC’s decision to commence the inquiry the subject of the proceedings and that both parties had moved or compromised their respective positions on the other reliefs sought in the proceedings.

Held by Barniville P that while it would have been open to him to refuse to deal with the question of costs on the basis that the parties could have dealt with costs in the agreement they reached settlement in all other aspects of the proceedings, he did not believe that that would be an appropriate exercise of his discretion on the particular facts of the case. To do so would, in his view, unnecessarily constrain his jurisdiction under the recast O. 99 RSC and would fail properly to take into account the significant public interest in encouraging parties to seek to resolve their disputes, where at all possible. Following the guidance contained in Hughes, he was satisfied that the appropriate order for costs was that the DPC pay 80% of Mr Schrems’ costs of the proceedings to be adjudicated upon in default of agreement. Barniville P deducted 20% of the costs to reflect the fact that Mr Schrems did not ultimately pursue his claim for an order quashing the inquiry and for the ancillary reliefs referred to in reliefs 2 to 3 of the statement of grounds. However, in light of the fact that Barniville P had accepted the explanation as to why Mr Schrems did not pursue his claim for that relief, it would not be appropriate to order Mr Schrems to pay 20% of the DPC’s costs and to deduct that from the 80% which Barniville P had ordered the DPC to pay.

Barniville P’s provisional view was that Mr Schrems should also receive 80% of the costs of the costs application itself, also to be adjudicated upon in default of agreement.

Costs awarded to applicant.

JUDGMENT of Mr. Justice David Barniville, President of the High Court, delivered electronically on the 29 ^th day of September 2022.

Index

1. Introduction	2
2. Summary of Decision on Costs Issue	3
3. Background	4
4. Approach to Determination of Costs Issue	6
5. Relevant Correspondence and Pleadings	7
6. The Proceedings	11
7. Correspondence Leading to Compromise of the Proceedings	16
8. Applicable Legal Test: Statutory Provisions and Legal Principles	28
9. Application of Legal Test and Decision	36
10. Conclusion	47

1. Introduction

1 . The judgment of the Court of Justice of the European Union in Case C-311/18 Data Protection Commissioner v. Facebook Ireland Ltd. And Maximilian Schrems (“ Schrems II”) on 16 July 2020 and the steps taken by the Data Protection Commission (“DPC”) following that judgment set in train a series of events which led to two sets of further proceedings being commenced in the High Court, one by Facebook Ireland Limited (“FBI”) and the other by Mr. Schrems.

2 . Mr. Schrems was a Notice Party to the proceedings brought by FBI (the “Facebook proceedings”) and fully participated at the hearing of those proceedings in December 2020. The Facebook proceedings were heard and determined by me. In a judgment delivered on 14 May 2021, [2021] IEHC 336 (the “Facebook judgment”), I dismissed FBI's claims in those proceedings. Orders were then made on consent on 20 May 2021.

3 . Those orders included an order that FBI pay 90% of the DPC's costs of the Facebook proceedings and all of Mr. Schrems' costs of those proceedings.

4 . The proceedings brought by Mr. Schrems, i.e., these proceedings, had been listed for hearing to commence on 13 January 2021 following the conclusion of the hearing of the Facebook proceedings. However, following an exchange of correspondence between Mr. Schrems' solicitors and the DPC's solicitors between 4 December 2020 and 12 January 2021 (and culminating in an agreement evidenced, in part at least, by a letter from Philip Lee, the DPC's solicitors, to Ahern Rudden Quigley (“ARQ”), Mr. Schrems' solicitors, dated 12 January 2021), Mr. Schrems and the DPC agreed to resolve all substantive issues in dispute in the proceedings on certain terms. However, the parties expressly left over the issue of the costs of the proceedings to be determined by me once I had delivered judgment in the Facebook proceedings. Subsequent to the delivery of the judgment in the Facebook proceedings on 14 May 2021 and to the making of orders in those proceedings on 20 May 2021, I directed the exchange of submissions between Mr. Schrems and the DPC on the issue of costs and held a hearing on that issue. This is my judgment on the costs issue.

2. Summary of Decision on Costs Issue

5 . In summary, the respective positions of the parties were as follows. Mr. Schrems sought his costs in full against the DPC on the basis that he had succeeded in obtaining a “substantial part” of the reliefs he was seeking in the proceedings, in accordance with the principles set out by Murray J. in his judgment for the Court of Appeal in Hughes v. Revenue Commissioners [2021] IECA 5 (“ Hughes”). In response, the DPC contended that there should be no order as to costs, on the basis that Mr. Schrems had not obtained the main relief he was seeking in the proceedings, which, it said, was an order quashing the DPC's decision to commence the inquiry the subject of the proceedings and that both parties had moved or compromised their respective positions on the other reliefs sought in the proceedings. It contended that Mr. Schrems had not obtained a “substantial part” of the relief he was seeking in the proceedings and that, therefore, in accordance with the applicable principles set out, principally, in Hughes, I should make no order as to costs.

6 . As I explain in more detail below, I am satisfied that the appropriate order to make in the exercise of my discretion in accordance with the applicable legal principles and the order which best does justice between the parties is that the DPC should pay 80% of Mr. Schrems' costs of the proceedings to be adjudicated upon in default of agreement. That is the order for costs which I will make in the proceedings.

3. Background

7 . A good deal of the relevant background is set out in the Facebook judgment. It is unnecessary and would be disproportionate to the issue which I have to decide to set out that background again in any great detail here. I refer in that regard to ss. 4–8, paras. 12–96 of the Facebook judgment. The procedural background is set out in s.9, at paras. 97 to 103. Reference is made to the resolution of Mr. Schrems' proceedings in s.10, paras. 104–106. I adopt all of that background for the purposes of this judgment.

8 . In very short summary, following the judgment of the CJEU in Schrems II on 16 July 2020 and exchanges of correspondence between Mr. Schrems and his solicitors and the DPC, and between Mr. Schrems' solicitors and FBI's solicitors, the DPC decided to undertake an own-volition inquiry to be conducted pursuant to s.110 of the Data Protection Act 2018 (the “2018 Act”) and Article 16 of the GDPR. The purpose of the inquiry was to consider two issues, namely:

• (a) Whether FBI was acting lawfully and in a manner compatible with the GDPR in making transfers of personal data relating to individuals in the EU/EEA using or interacting with FBI's services to Facebook Inc. pursuant to certain standard contractual clauses (SCCS) following the judgment in Schrems II; and

• (b) Whether and/or which corrective power should be exercised by the DPC under the GDPR in the event that it reached the conclusion that FBI was acting unlawfully and infringing the GDPR.

9 . The...