Administrative Court refuses permission to legal challenge to the UK Government’s lockdown regulations

Dolan & Ors v Secretary of State for Health And Social Care & Anor [2020] EWHC 1786 (Admin)

A claim brought by the entrepreneur Simon Dolan and others (“the Claimants”) seeking to challenge the lockdown measures introduced by the English Government following the COVID-19 outbreak has been refused permission in the Administrative Court. The claim attracted considerable attention as it was crowdfunded and challenged a key aspect of the Government’s response.

The Claimants challenged the provisions of the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 as amended (the “Lockdown Regulations”) on the basis that they were unlawful on various grounds. Following a hearing on 2 July 2020, Mr Justice Lewis refused permission to the Claimants.

Background

Following the outbreak of the virus and the consequent risk to public health and safety, the Secretary of State for Health and Social Care, Matt Hancock (“the SoS”), made the Lockdown Regulations on 26 March 2020, which introduced a number of restrictions and requirements on those living and working in England. This included the requirement for certain businesses to close during the emergency period, and also imposed strict restrictions on movement and gatherings (referred to colloquially as the ‘lockdown’).

The Lockdown Regulations have been amended a number of times since they were first made. These Regulations were also applicable only in England as the governments of Wales, Scotland and Northern Ireland made separate regulations using their devolved powers. Our previous blogposts on the Lockdown Regulations are available here and here.

The challenge

Following a major crowdfunding campaign that saw them raise over £200,000, the Claimants sought permission to challenge the Lockdown Regulations. The Claimants argued that the Lockdown Regulations were unlawful on a number of public law grounds, including that they were ultra vires and irrational. The Claimants also suggested that specific provisions of the Lockdown Regulations breached the European Convention on Human Rights (“ECHR”). These grounds are summarised in paragraph 24 of the judgment.

It is worth noting that by the time the challenge was heard on 2 July 2020, a number of the restrictions set out in the original Lockdown Regulations had been replaced and were no longer in force. In fact, on 3 July, the Lockdown Regulations were superseded in most parts of England by The Health Protection (Coronavirus, Restrictions) (No. 2) (England) Regulations 2020 along with a separate set of regulations applicable to Leicester.

Issues and judgment

The Court considered nine separate issues as part of the application for permission.

  • The first issue was whether the claim had been brought ‘promptly’ as required under the Civil Procedure Rules and whether the claim was academic as a result of the relevant provisions of the Lockdown Regulations no longer being in force. On the question of promptness, Mr Justice Lewis concluded that there was no failure to act promptly given the “complexity and importance of the issues” and that the Claimants were not prevented from bringing the claim on that basis. However, on the second question, the Court found that the claim for judicial review of the original regulation 6 (the prohibition on a person leaving home without reasonable excuse) and the original regulation 7 (the prohibition on more than two people gathering in public) was academic, and that there would be no practical purpose served through a claim for judicial review of those specific regulations. The Court observed that:

The fact that restrictions may be imposed in future, depending on the progress of the pandemic, does not provide a good reason for reviewing the original versions of the regulations now. Any challenge to a subsequent or replacement regulation would necessarily involve considering the content of that regulation and the circumstances leading to its imposition.

This observation may be of relevance to any future challenges to the Government’s response to the pandemic.

  • The second issue before the Court was one of vires – specifically, whether the SoS had the legal power to make regulations applying to all persons in England under the powers conferred by the Public Health (Control of Diseases) Act 1984 ( “the 1984 Act”). The Court concluded that section 45C of the 1984 Act did in fact confer power on the SoS to make regulations that applied to persons, premises and things in England as a whole in appropriate circumstances (and on the basis that the restrictions would be kept under review in line with the provisions of the 1984 Act). Consequently, permission on that ground was also refused.
  • The third issue focussed on the Claimants’ argument that the making of the Regulations was unlawful for four reasons of domestic public law. First, that the SoS had fettered his discretion by requiring five tests to be met before the Lockdown Regulations would be replaced. Secondly, it was argued that the SoS failed to have regard to relevant issues when making the Lockdown Regulations. Thirdly, the Claimants submitted that the Regulations were irrational, and finally, that they were not proportionate under the 1984 Act. The Court analysed these grounds in some detail in paragraphs 47-63 of the judgment, and concluded that there was no basis on which these four sub-grounds could be reasonably argued. Permission was accordingly refused on this issue.
  • The fourth, fifth, sixth, seventh, and eighth issues all revolved around the Claimants’ arguments that the Lockdown Regulations imposed various requirements and restrictions that were contrary to a number of Articles of the ECHR. The relevant articles included the right to liberty and security (Article 5), the right to private and family life (Article 8), freedom of religion (Article 9), freedom of peaceful assembly and association (Article 11), and the right to property (Article 1 of the First Protocol). The Court considered the scope of the rights under these Articles, and concluded that it was not arguable that these rights and freedoms were affected. Even where specific rights were affected – for instance, in the case of the freedom of assembly and association – the Court concluded that the restrictions were justified and proportionate. The Court went as far as saying that “in all reality in those circumstances, there is no realistic prospect of a court deciding in these, possibly unique, circumstances that the regulation was a disproportionate interference with the rights guaranteed by Article 11 of the Convention.

The only exception was the sixth issue on the freedom of religion. Specifically, the Claimants argued that the prohibition on the use of places of worship for communal acts of worship involved a breach of Article 9 of the ECHR. Mr Justice Lewis was minded to let that specific issue proceed to a full hearing in light of a previous decision on a similar issue (R (Hussain) v Secretary of State for Health and Social Care [2020] EWHC 1392 (Admin)). However, following the making of new regulations on 3 July 2020 permitting acts of communal worship for up to 30 people, this issue was considered to be academic. Nevertheless, as the new regulations were made after the hearing on 2 July, the parties have been given the opportunity to make further submissions on this point.

  • The final issue was directed at the Secretary of State for Education (the second Defendant), and focussed on the Government’s 18 March 2020 announcement that education should not be provided at school premises in England save for the children of key workers and vulnerable children. The Claimants suggested that this announcement was in effect a direction for schools to close, and therefore amounted to a breach of Article 2 of Protocol 1 to the ECHR which protects the right to education. However, the Court concluded that there was no legally enforceable measure made by either SoS preventing attendance at school. Further, the Court noted that the current policy of the Government was to encourage the return of pupils on a phased basis. Consequently, any claim in relation to schools and Article 2 Protocol 1 was academic. Permission was therefore refused on this ground as well.

Summary

Through this detailed judgment refusing permission, the Administrative Court has firmly rejected the Claimants’ submissions that the Government (acting through the two Secretaries of State) acted unlawfully in making the Lockdown Regulations. The Claimants are considering appealing the decision. It is unclear whether they intend to make further submissions to the Administrative Court on the freedom of religion issue.

It is worth noting that while the judgment relates to the most prominent aspect of the Government’s response i.e. the decision to introduce the lockdown, other decisions taken by the Government either previously or going forward can still be challenged. However, in circumstances where the regulations and guidance are changing on a day-to-day basis, Mr Justice Lewis’ comments on ‘academic’ claims may turn out to be relevant to any current and future challenges.

Separately, this claim was notable for being the biggest of the crowdfunded cases threatened or brought against the English Government so far in the COVID-19 context. Crowdfunding of judicial reviews provides an opportunity for political participation from the public at large, but we can see it throwing up numerous issues around how the money raised is being used, and whether funders are fully aware of the legal merits of challenges. The costs implications where a crowdfunded claim for judicial review fails are also as yet unknown, and Mr Justice Lewis made no comments on costs in this judgment.

If you have any questions on the public law aspects of COVID-19, please contact Andrew Lidbetter, Nusrat Zar, Jasveer Randhawa or Sahil Kher. You can listen to our podcast on various public law issues surrounding COVID-19 here, including our latest episode on regulators and their response to the pandemic.

Please also visit our client COVID-19 Hub here for insight from Herbert Smith Freehills on the wider legal issues surrounding the current outbreak.

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Statutory guidance must remain within the purpose of the primary legislation

In R (on the application of Palestine Solidarity Campaign Ltd) v Secretary of State for Housing, Communities and Local Government [2020] UKSC 16, the Supreme Court demonstrates that statutory guidance will be considered unlawful if it does not remain within the scope of what Parliament intended when it was conferring the power to issue that guidance.

Key points

  • If a statute gives a public authority a discretion it is important to look at the wording of the legislation as a whole to see the purpose which Parliament had in mind.
  • A public authority should not use a statutory discretion so as to thwart or run counter to the policy and objects of the Act.

Background

The Public Services Pensions Act 2013 (the “2013 Act”) governs the establishment and management of certain pension schemes by local authorities for the benefit of their employees. The 2013 Act empowers the Secretary of State for Housing, Communities and Local Government (the “Secretary of State”) to issue more detailed regulations and guidance regarding the schemes. The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 (the “2016 Regulations”) and a guidance document entitled the Local Government Pension Scheme: Guidance on Preparing and Maintaining an Investment Strategy Statement” (the “Guidance”), were then issued pursuant to Regulation 7(1) of those 2016 Regulations.

The Guidance noted that local authorities were not trustees of these pension schemes and so were not subject to trust law. It nonetheless stated that those responsible for making investment decisions “must comply with general legal principles governing the administration of scheme investments”. These principles included a requirement to consider various factors including “social, environmental and corporate governance considerations” – wording which had appeared in the 2016 Regulations.

The Guidance included a caveat to this obligation for the purposes of ethical investments. It permitted local authorities to take non-financial considerations into account when determining which investments to make as part of their pension schemes as long as: (1) there was good reason to think that the scheme members would support the investments; and (2) the investments did not involve significant risk of financial detriment to the scheme. These two tests for non-financial considerations had in fact already been set out in a 2014 report by the Law Commission which the Secretary of State drew from when preparing the Guidance. However, unlike the Law Commission’s report, the Guidance went onto state that “using pension policies to pursue boycotts, divestment and sanctions against foreign nations and UK defence industries are (sic) inappropriate, other than where formal legal sanctions, embargoes and restrictions have been put in place by the Government”. In other words, the Guidance required local authorities to only make or continue to hold ethical investments which were in accordance with the United Kingdom’s foreign and defence policies.

The lawfulness of the Guidance was challenged by the Palestine Solidarity Campaign Limited and Ms Jacqueline Lewis (the “Appellants”). Ms Lewis was an executive committee member of the Palestine Solidarity Campaign as well as a local authority employee. Although the Appellants were initially successful in the High Court in 2017, the Court of Appeal overturned that decision in 2018 and held that the Guidance was lawful. The Appellants therefore brought the case before the Supreme Court.

Judgment

The Supreme Court found the relevant section of the Guidance to be unlawful by a majority of three to two. Lady Hale, Lord Wilson and Lord Carnwath constituted the majority whilst Lady Arden and Lord Sales provided the dissenting opinion.

The fundamental finding in the judgment prepared by Lord Wilson and agreed by Lady Hale was that certain sections of the Guidance were unlawful on the basis that they were ultra vires i.e. they went beyond the Secretary of State’s powers. Lord Wilson and Lady Hale reached this conclusion through applying the Padfield principle[1], where it was held that an unfettered statutory power could only be exercised to promote the policy and objects of the statute. Discerning the policy and objects of an Act must be determined by construing the Act as a whole and construction is always a matter of law for the Court.

Lord Wilson and Lady Hale therefore considered the 2013 Act in order to identify exactly what Parliament had intended regarding the scope of the Secretary of State’s discretion when issuing the 2016 Regulations and the Guidance. Sections 1(1) and 3(1) of the 2013 Act permitted the Secretary of State to make further provisions as the Secretary of State “consider[ed] appropriate”. Section 3(2)(a) and Schedule 3 read together indicated that the Secretary of State was permitted “in particular” (i.e. not exclusively) to make provision regarding the “administration and management of the scheme”.

It is established[2] that unchallenged secondary legislation can serve as a guide to the interpretation of an enabling Act. Lord Wilson and Lady Hale therefore also considered the 2016 Regulations, specifically the fact that Regulation 7(e) mandated a local authority’s investment strategy to include the authority’s policy on “how” it took non-financial considerations into account.

Finally, Lord Wilson and Lady Hale reviewed other unchallenged sections of the Guidance itself. They noted that the Guidance, the 2013 Act and the 2016 Regulations and the Guidance contained a number of words such as “administration”, “management” and “strategy”. They found that all of these words, considered in their contexts, pointed in the same direction: that Parliament had intended to identify the procedures and strategy that administrators of schemes should adopt in the discharge of their functions. Importantly, Lord Wilson and Lady Hale did not consider that this included a discretion to direct what investments they should make or not make. By seeking to restrict the schemes in such a way that they could only make ethical investments which were in accordance with the United Kingdom’s foreign and defence policies, the Secretary of State was unlawfully exceeding his powers.

Lord Wilson and Lady Hale also made direct reference to the Secretary of State’s justification for those challenged sections of the Guidance. They disagreed with the Secretary of State’s “misconception” of the investment decisions as a function of local government and the pension funds as public money. They found instead that the funds properly belonged to the local authority employees whose pensions it would pay and that investment decisions were made by administrators who were acting in the role of quasi-trustees acting in the best interests of their members. They noted that this misconception might have emboldened the Secretary of State to exceed his powers when issuing the Guidance.

Lord Carnwath gave a separate judgment reaching the same outcome as Lord Wilson and Lady Hale. He disagreed with the Secretary of State’s argument that the Guidance was intended to deal with concerns about the specific Boycott, Divestment and Sanctions movement rather than ethical investments as a whole. Even if this were the case, he said that forbidding local authorities to invest in one particular movement was not related to a pensions purpose and thus was unlawful in any event on the basis of improper purpose.

Lady Arden and Lord Sales dissented from the majority – they considered that it fell within the Secretary of State’s broad discretion under the 2013 Act to promulgate the Guidance in its existing form. They similarly considered the Padfield principle and agreed that the Courts were the “authoritative organ for the interpretation of a statutory power”. However, they did not read the same limitations into the 2013 Act from its wording and context as the majority did. The Secretary of State could make further provision regarding non-financial considerations as he “consider[ed] appropriate” – they did not limit this to provisions regarding only the administration and management of the scheme as the majority did. They agreed with the Court of Appeal that it was “plainly within the scope of the legislation for the guidance to cover the extent to which such non-financial considerations may be taken into account by an authority”.[3]

Moreover, the 2013 Act permitted the Secretary of State to take “wider considerations of public interest” into account when preparing this Guidance. Lady Arden and Lord Sales recognised that this gave wide discretion to the Secretary of State but found the reasoning for this in the context of the Act. They noted that it had emerged as part of a package of measures which were intended to reform public service pensions so that they took due account of beneficiaries’ interests but also the public interest and the role of central Government in relation to such pension schemes. The Government underwrote funded schemes such as this and, if necessary and subject to a cap, would compensate for any shortfall. The Government therefore had a legitimate interest in ensuring that the schemes, which might potentially require public funding, pursued the public interest.

Comment

The Supreme Court’s decision serves as a reminder of fundamental public law principles. It is well-established that public bodies’ actions, including the preparation of documentation such as secondary legislation and statutory guidance, will be considered unlawful if they exceed the powers afforded to them by statute. However, what those powers might be is not always easy to divine. The Padfield principle tells public authorities to limit themselves in accordance with the policy and objects of an Act. This is to be ascertained by construing that Act as a whole. Public authorities should look to the context surrounding the passing of that statute by Parliament. This might include Parliamentary debates and any relevant reports from select committees or otherwise. Given the split across judicial opinion in the Supreme Court in this case, it is clear that this is not necessarily a simple task.

[1] See Padfield v Minister of Agriculture, Fisheries and Food [1968] UKHL 1

[2] See Hales v Bolton Leathers Ltd [1951] AC 33

[3] See paragraph 20 of R (on the application of Palestine Solidarity Campaign Ltd) v Secretary of State for Housing, Communities and Local Government [2018] EWCA Civ 1284

 

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Webinar on recent developments in judicial review

HSF public law partner Nusrat Zar chairs and speaks at a recent LexisNexis webinar on key developments in judicial review, which includes a discussion on recent caselaw regarding the duty to consult, human rights in judicial review and the interaction of private and public law.

You can watch the webinar via this link.

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Today in a unanimous decision the Court of Appeal found that the current Government policy in relation to the expansion of Heathrow Airport is unlawful

Background

The Court of Appeal has today handed down two related judgments both concerned with the Government’s policy in relation to the proposed expansion of Heathrow by way of a third runway, one dealing with the detail of how expansion should take place and the other considering the planning aspects and process of the policy. This latter case originated as five judicial review applications at the High Court. The policy in question was set out in the “Airports National Policy Statement: new runway capacity and infrastructure at airports in the south east of England” (the “ANPS”), which was designated by the then Secretary of State for Transport under section 5(1) of the Planning Act 2008.

The appellants in this appeal ranged from local authorities and climate change campaigners to the Mayor of London. The Court of Appeal was unconvinced by the appellants’ attempts to overturn the first instance judgment on various issues relating to the Habitats Directive and the Strategic Environmental Assessment Directive and broadly agreed with the judgment of the Divisional Court on many of those aspects.

And then there was one…

The appellants succeeded today on only one ground: the Court of Appeal found that the designation of the ANPS was unlawful by reason of a failure to take into account the Government’s commitment to the provisions of the Paris Agreement on climate change.

The question upon which the decision turned was what is “Government policy” relating to climate change, pursuant to section 5(8) of the Planning Act which requires that the reasons for the policy set out in the ANPS “must … include an explanation of how the policy set out in the statement takes account of Government policy relating to the mitigation of, and adaptation to, climate change” [emphasis added].

The court found that the Government’s commitment to the Paris Agreement was “clearly” part of Government policy by the time of the designation of the ANPS because the Paris Agreement was ratified and there were firm statements re-iterating Government policy of adherence to the Paris Agreement by relevant Ministers. The concept of “Government policy” did not have any specific technical meaning, but should be applied in its ordinary sense. In particular, there was nothing to warrant limiting the phrase “Government policy” to mean only the legal requirements of the Climate Change Act. The concept of policy is necessarily broader than legislation.

The Court of Appeal concluded that the Paris Agreement was not taken into account by the Secretary of State in the preparation of the ANPS and so there was no explanation provided as to how it was taken into account. Indeed it appears that the Secretary of State received legal advice that not only did he not have to take the Paris Agreement into account but that he was legally obliged not to take it into account, which amounted to a material misdirection of law at an important stage of the process.

Potential consequences

Although the appellants won today and at the time of seeing the draft judgment the Government did not seek to appeal the decision to the Supreme Court, this is not necessarily the end of the matter.

The court decided not to quash the ANPS. Instead, it declared that the ANPS in its present form is unlawful and cannot have legal effect, which gives the Secretary of State the opportunity to reconsider the ANPS. The court stated that the initiation, scope and timescale of any such review must and will be a matter for the Secretary of State to decide. The court also explained that the duty in section 5(8) does not require the Government to conform to its own policy commitments, “simply to take them into account and explain how it has done so”.

Importantly, the court repeatedly emphasised the line between its judgment and the politics of the third runway:

“[We] are required to consider whether the Divisional Court was wrong to conclude that the Government’s policy in favour of the development of a third runway at Heathrow was produced lawfully. That is the question here. It is an entirely legal question. …”

“We have made it clear that we are not concerned in these proceedings with the political debate and controversy to which the prospect of a third runway being constructed at Heathrow has given rise. That is none of the court’s business…..”

“Our decision should be properly understood. We have not decided, and could not decide, that there will be no third runway at Heathrow.”

These comments reflect the well-established purpose and role of judicial review, aimed at ensuring that the Executive is held to account in its decision making but without straying into the sphere of policy making and politics.

The judgments can be found here: R (on the application of (1) Heathrow Hub Limited (2) Runway Innovations Limited) v Secretary of State for Transport [2020] EWCA 213 and R (on the application of Plan B Earth and others) v Secretary of State for Transport [2020] EWCA 214.

Andrew Lidbetter
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Nusrat Zar
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Shameem Ahmad
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High Court gives guidance on conduct of non-statutory inquiries

In R (on the application of Clarke and Others) v Holliday [2019] EWHC 3596 (Admin), the High Court dismissed an application for permission to apply for judicial review of decisions taken by the Chairman of an independent, non-statutory inquiry (the “Inquiry”). In doing so the court proceeded on the basis that the Inquiry was amenable to judicial review but did not reach a concluded view on that point given that it had dismissed all of the grounds of challenge.

Key points

  • Non-statutory inquiries may be amenable to judicial review and should comply with public law principles (such as procedural fairness).
  • The courts will carefully examine whether those tasked with making public law decisions have engaged in unlawful delegation.
  • The requirements of “Maxwellisation” (and other elements of procedural fairness) are limited and public bodies should be wary of voluntarily adding other stages to the process.

Background

The Inquiry arose out of the procurement process which the Nuclear Decommissioning Authority (the “NDA”) had conducted in relation to the decommissioning of the twelve Magnox nuclear sites.

That procurement competition had concluded in April 2014, at which time the NDA awarded a contract worth around £6 billion to Cavendish Fluor Partnership (“CFP”). Two members of the runner-up consortium then brought claims challenging the procurement process, which were ultimately settled (following a finding by the High Court that the NDA had made errors in the procurement competition) for a total of just under £100 million. Subsequently the NDA terminated the contract it had awarded to CFP nine years early.

The Terms of Reference of the Inquiry, which was established by the Secretary of State for Business, Energy and Industrial Strategy in the wake of these events, required the Chairman, Mr Steven Holliday, to investigate the procurement process and subsequent events.

The Inquiry established the following four-stage process for providing evidence and including critical comments in the final report:

  • document assistance interviews;
  • evidence-gathering interviews;
  • potential criticism interviews; and
  • a representations process.

During stage 3, anyone whom the Inquiry was considering criticising in its final report would receive a letter inviting them to interview and setting out the potential criticisms and relevant documents. The Inquiry would then consider whether to include the criticism in the final report. During stage 4 the Inquiry would then send extracts of the draft report containing the proposed criticisms and the accompanying evidence to the relevant individuals, who could make written representations before the report was finalised. Before sending extracts of the draft report (or accompanying evidence) to individuals the Inquiry required them to sign a confidentiality undertaking which prohibited them from sharing the material with anyone else.

The claim and judgment

The five individual claimants were members of NDA’s senior management team during the procurement process. They were each notified by the Inquiry that they may be subject to criticism in the Inquiry’s final report.

Four of the five claimants participated in stage 3. They were invited to participate in stage 4 however refused to do so pending resolution of their claim (as they refused to sign the confidentiality undertaking). The other claimant did not participate in stage 3 (because at that time the Inquiry had not identified a criticism of him) but was invited to participate in stage 4 and signed a confidentiality undertaking accordingly.

Challenges were brought on a number of grounds, including that: Mr Holliday had unlawfully delegated his decision-making functions to his staff; that the Inquiry had failed in its duty to disclose material to the claimants; and that the Inquiry had unfairly prohibited information-sharing through the use of confidentiality undertakings.

In addition to defending these grounds, the defendant claimed that the Inquiry was not amenable to judicial review.

Unlawful delegation

The claimants alleged that Mr Holliday had unlawfully delegated his decision-making functions by permitting staff members to reach provisional findings during stage 3 (the “potential criticisms” stage), which he had been unduly influenced by. In support of their position, the claimants relied on the Hong Kong Court of Appeal case of Dato Tan Leong Min v Insider Dealing Tribunal [1999] HKC 83 which noted that “Counsel for the Tribunal should never be invited to assist in the writing of the report or to make submission upon the draft report”.

Although the court found this ground to be arguable, and so granted permission to apply for judicial review, it ultimately dismissed the claim. This was because, having examined the evidence, it was clear that no decisions had been made at stage 3 but rather the potential criticisms had been “formulated as a tool for exploring issues”. It was permissible for members of the Inquiry team to compile such potential criticisms; the important point was that “sole responsibility for formulating and adopting final decisions as to the criticisms” remained with Mr Holliday.

While the court did not find that the Inquiry’s conduct was unlawful, it did consider that the manner in which stage 3 had been carried out created “unnecessary anxiety and could have been better handled”. In particular the drafting of the potential criticisms (some of which appeared to be expressed in terms which were conclusive) could have been improved.

Interestingly the court also found that the Inquiry “need not have adopted” the two stage process set out in stages 3 and 4. As a matter of procedural fairness, only the latter stage (often known as “Maxwellisation”, whereby provisional findings which might adversely affect a person are put to them with an opportunity for them to respond) was necessary.

Other grounds

The court refused permission to apply for judicial review in relation to each of the other grounds. It found that the challenge on the basis of the lack of disclosure was premature (as disclosure would occur during stage 4 which had not yet happened) and that the Inquiry’s use of confidentiality undertakings was lawful in the circumstances (noting that the Inquiry had said that it would consider requests to share information on a case-by-case basis).

Amenability

Although (having dismissed all grounds) the court did not make a finding on whether the Inquiry was amenable to judicial review, the judge did indicate his view that the Inquiry was exercising a public function. The judge emphasised that this is a fact specific question and that, in his view, non-statutory inquiries will not always be amenable to judicial review.

Comment

This case illustrates that those tasked (whether by Parliament, Government, or otherwise) with making public law decisions must ensure that they do not unlawfully delegate their functions. In an inquiry context, this is likely to mean that the Chair must retain responsibility for formulating and adopting criticisms and recommendations. In addition, those engaged in preparing reports (or commenting on draft reports) which are subject to a “Maxwellisation” process should be mindful of the court’s comments about the limits to this duty and be cautious of voluntarily adding steps to the process which are not required as a matter of procedural fairness.  Although in this case the flaws with the execution of those additional steps were not sufficient to make the process unlawful, this case shows that the courts will still scrutinise the process (which here resulted in criticism of the Inquiry).

Andrew Lidbetter
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Nusrat Zar
Nusrat Zar
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James Wood
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Policy making through the back door – Spotting issues and challenging Brexit-related SIs

With the European Union (Withdrawal Agreement) Act 2020 (the Withdrawal Agreement Act) now formally on the statute books, Britain is set to exit the EU at the end of January. Exit day, however, only marks the next step in the Brexit process. The UK will enter into a transition period until 31 December 2020, during which time the UK and the EU will seek to negotiate a trade deal.

Meanwhile, work is continuing to fill the gaps in the UK’s legislative landscape following Brexit in accordance with the scheme laid down in the European Union (Withdrawal) Act 2018 (the Withdrawal Act). These gaps are largely being filled through statutory instruments (SIs) rather than primary legislation. Research by the Public Law Project as part of its Statutory Instruments: Filtering and Tracking (SIFT) project suggests that a total of nearly 1000 SIs will have been laid down by exit day. Introducing secondary legislation is undoubtedly quicker and administratively easier for law makers, and in most cases the legislation will go no further than is permitted by the Withdrawal Act, as amended by the Withdrawal Agreement Act. Brexit-related Statutory SIs may, however, provide cause for concern for businesses and individuals if there is a risk that SIs are being used to introduce significant legal and policy changes.

What are Statutory Instruments?

The power to make an SI is usually conferred on a Minister through an Act of Parliament, and the Minister is then able to make law on the matters identified in the relevant Act. SIs typically do not go through the same Parliamentary scrutiny as Acts of Parliament. Some SIs are subject to the “affirmative procedure”, which means that they are scrutinised by the Joint Committee on Statutory Instruments (JCSI), and then approved by both Houses before being signed by a Minister. However, the majority of SIs in Parliament are laid under the “negative procedure”, by which they become law (after the JCSI scrutinises them) on the day the Minister signs them, and automatically remain law unless a motion to reject the SI is agreed by either House within 40 sitting days. Such a motion has not been agreed in the House of Commons since 1979 and in the House of Lords since 2000. Additionally, there is now a European Statutory Instruments Committee (ESIC) in the Commons. The ESIC ‘sifts’ through Brexit-related SIs and can recommend that a different procedure be used to make a particular SI. The Secondary Legislation Scrutiny Committee (SLSC) is tasked with a similar sifting exercise in the House of Lords. However, there remain concerns around whether this sifting process is effective (and in any case, it does not apply where a Minister makes a declaration of urgency).

In the context of Brexit, sweepingly broad powers have been given to the executive under the  Withdrawal Act to make regulations in order to ensure that the law functions as normal on exit day. Section 8 of the Withdrawal Act gives ministers the power to “make any provision that could be made by an Act of Parliament” to “prevent, remedy or mitigate” any failure of retained EU law to operate effectively, or any other deficiency in retained EU law, arising from the withdrawal of the UK from the EU. Additionally, the Withdrawal Agreement Act inserts a number of new powers into the Withdrawal Act – including powers under a new section 8A to modify any provision made by or under an enactment for purposes connected with the arrangements for a transitional period. Further, the so-called ‘Henry VIII power’ to amend primary legislation via secondary legislation (which has been subject to considerable criticism) has been extended to Ministers for use in a number of other contexts.

Possible impact

Brexit is a period of exceptional legislative change and challenge. There is therefore a chance that the body of SIs being introduced is not entirely cohesive and joined up. There is also a risk that new SIs are introduced which go further than was envisaged in the primary legislation whilst, in practice, being subject to little or no scrutiny by Parliament.

This is not merely an academic issue. SIs that have been introduced or proposed in the lead up to exit day cover a wide range of topics including cross-border taxation, pharmaceutical testing, financial services, energy regulation, and environmental protections. Often, they contain the nuts and bolts of the regulatory framework that primary legislation does not cover, and deal with complex technical topics that only businesses and experts may fully be able to understand and analyse. Consequently, unless businesses are vigilant, there is a risk that the raft of SIs introduced could inadvertently bring in new obligations on businesses through the back door or fundamentally alter the regulatory landscape.

For instance, the Cross-border Trade (Public Notices) (EU Exit) Regulations 2019 were laid and would have empowered officials to amend VAT or customs and excise law by public notice following Brexit. These regulations would have represented a fundamental shift in tax law in the UK as it would have equipped Treasury officials with the power to amend the law simply by giving public notice. However, HMRC were forced to back down and revoke this SI following the threat of legal action.

On the other hand, the suite of SIs dealing with the financial services sector have been the subject of extensive consultation involving both the financial regulators and the affected institutions as well as lawyers operating in the relevant area, in a way which reduces the risk of legislative overreach.

Spotting issues and challenging SIs

The HMRC example shows why it would be prudent for businesses to keep a close eye on SIs relevant to their industry or sector and to engage with the relevant government department directly, or through a trade association on the contents of such legislation.

Courts do not generally have the power to strike down Acts of Parliament save in EU law cases (and there could be a “declaration of incompatibility” in Human Rights Act cases). However, the position is different for statutory instruments as they can be challenged on administrative law grounds and potentially struck down. For example, the Supreme Court recently reaffirmed the position that secondary legislation is subordinate to the requirements of an Act of Parliament (RR v Secretary of State for Work and Pensions [2019] UKSC 52). [1] There is therefore scope for challenging SIs if they are ultra vires i.e. where they go beyond the scope of the power conferred by the relevant Act of Parliament.

In the Brexit context, it is important to note that the legislative purpose underpinning section 8 and the new section 8A of the Withdrawal Agreement is to plug legislative gaps and fix deficiencies following Brexit, and not to introduce new policies. Consequently, any SIs that introduce wider policy changes could be open to challenge. There may also be other substantive grounds to challenge SIs. For example:

  • If its provisions contravene the European Convention on Human Rights (ECHR);
  • If it can be demonstrated that the SI is irrational; or
  • If irrelevant considerations were taken into account, or relevant considerations not taken into account, when the SI was made.

There is also the possibility that an SI could introduce new wording that is open to interpretation. While the wording itself might on its face be interpreted as being within the scope of the Withdrawal Act powers given to Ministers, the Government could in the future interpret such wording in a way that could be considered to be beyond such powers. The English Courts have not yet had occasion to fully set out how it would deal with such situations. However, in an early challenge against three separate Brexit-related SIs (R on the application of Client Earth and anr v Secretary of State for Environment, Food and Rural Affairs [2019] EWHC 2682 (Admin)), the High Court indicated that challenges could in theory be brought against “a specific future decision” relying on the terms of an SI.

In any event, a decision to challenge an SI (or an act of the Government relying on the terms of an SI) will have to be taken swiftly. Applications for judicial review must be made promptly and, in any event, within three months of the relevant decision. It is therefore essential for businesses and organisations to take immediate legal advice to consider whether an SI throws up concerns, whether it can be challenged by way of judicial review, and if so, how and when to bring such a challenge.

Conclusion

The Government’s use of SIs to fill legislative gaps is understandable. That being said, there remains a concern that SIs could introduce wider legal and policy changes. In the circumstances, it is important for businesses and their advisers to monitor whether these SIs impact their operations (or, indeed, whether they could impact their operations in the future). If there is a risk of that happening, businesses should consider whether seeking the court’s oversight via judicial review proceedings is necessary.

[1] HSF acted for three charities who jointly intervened before the Supreme Court in this case. More detailed insight into the judgment is available in our e-bulletin here and in our Public Law podcast here.

Andrew Lidbetter
Andrew Lidbetter
Partner
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Nusrat Zar
Nusrat Zar
Partner
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Jasveer Randhawa
Jasveer Randhawa
Of Counsel
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Sahil Kher
Sahil Kher
Associate
+44 20 7466 6448

Labour’s plans for energy and medicines – public law analysis

We have published two papers which consider the impact of the Labour Party’s recently announced policies on two heavily regulated sectors, namely the energy and pharmaceutical industries. The policies proposed in relation to both sectors, which are similar to those now also proposed in other industries (such as the water industry and in relation to Royal Mail) are central aspects of Labour’s nationalisation agenda. Taking forward such policies would engage key public law principles and would give rise to likely challenges on the basis of the level of compensation payable, amongst other things.

In Labour’s recent report entitled “Medicines for the Many”, Labour has proposed using existing powers of “Crown Use” and “compulsory licenses” to acquire patented information for the state’s purposes. Labour’s report also suggests that a future Labour government would seek to limit the basis on which compensation would be payable to holders of such patents. In addition to concerns which these proposals raise under intellectual property and investment treaty law, they give rise to questions about the compatibility of such measures with the right to property, which is protected by the common law, the EU Charter, and the European Convention on Human Rights (as incorporated into domestic law by the Human Rights Act 1998). For more information please see our briefing paper here.

Similarly, in its manifesto, the Labour Party has set out in more detail the measures which it proposes in relation to the energy industry. Broadly these measures would involve the nationalisation of significant parts of the energy sector (including the network companies and the energy supply businesses of the Big Six). As with its medicines proposals, if a future Labour government sought to implement these policies, we envisage challenges being brought on public law and human rights grounds given that they would involve interference with the companies’ and investors’ property. For more information on these issues, including in relation to steps that can be taken to protect property rights, please see our briefing paper here.

Andrew Lidbetter
Andrew Lidbetter
Partner
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Nusrat Zar
Nusrat Zar
Partner
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Jasveer Randhawa
Jasveer Randhawa
Of Counsel
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James Wood
James Wood
Senior Associate
+44 20 7466 2306

Incidental powers allow public body to publish its findings in the public interest

In Vote Leave Ltd v The Electoral Commission [2019] EWCA Civ 1938 the Court of Appeal found that it was within the Electoral Commission’s incidental powers to publish a report setting out its investigation and findings in relation to payments made by Vote Leave Ltd (“Vote Leave”) during the 2016 EU referendum (the “Report”). In doing so, the Court also made wider comments on the public interest in public bodies publishing such information.

Key Points

  • Public bodies acting pursuant to statutory powers might have implied or incidental powers in addition to those expressly conferred by the relevant statute.
  • There is a strong public interest in public bodies with an investigative function being as transparent as possible.

Background

The Electoral Commission conducted an investigation into Vote Leave pursuant to its powers under the Political Parties, Elections and Referendums Act 2000 (the “Act”). It subsequently fined Vote Leave in relation to payments that the organisation had made during the 2016 referendum.

The Electoral Commission also published a report on its website setting out its investigation and findings (the “Report”). Vote Leave sought permission to judicially review the Electoral Commission’s publication of the Report on the basis that it was not within the body’s statutory powers.

Vote Leave was initially refused permission to apply for judicial review by the High Court. Vote Leave successfully appealed that decision in the Court of Appeal – the judge granted them permission to challenge the Electoral Commission’s publication of the Report by way of judicial review and ordered that the challenge be heard directly in the Court of Appeal.

Judgment

The Court of Appeal dismissed the challenge. The decision turned on a point of statutory construction. The Court confirmed that the Act did not expressly empower the Electoral Commission to publish the Report. However, it disagreed with the appellant’s submission that such a power could not be conferred by implication. The full range of public authorities’ powers are not necessarily expressly set out in statute – for example it is well recognised that local authorities have the power to carry out activities which are incidental to their express statutory functions. This principle is codified in respect of the Electoral Commission at Paragraph 2 of Schedule 1 to the Act which reads: “The [Electoral] Commission may do anything (except borrow money) which is calculated to facilitate, or is incidental or conducive to, the carrying out of any of their functions” (emphasis added). This is a common form of wording which is found in a variety of statutory contexts.

In this instance, the Court found that the publication of the Report was incidental to the Electoral Commission’s express statutory function of “monitoring” or “securing” participants’ compliance with the Act during the referendum. In response to the appellant’s suggestion that such “monitoring” or “securing” compliance could only happen during a campaign itself, the Court found that subsequent investigations such as this were at the very least a method of “securing” compliance. The knowledge that the Electoral Commission might later conduct an investigation and publish its findings was an incentive for organisations to comply with the Act whilst campaigning. To suggest otherwise was “over-literal”. Singh LJ in particular also considered that the Report was a method by which to “monitor” compliance – it was “simply unrealistic” to expect the Electoral Commission to publish the Report during the referendum itself and a broader construction of the word was required. The Court also disregarded the appellant’s suggestion that the existence of express provision in the Act to make reports in other circumstances meant that an incidental power to publish the Report in this circumstance could not be inferred.

The Court went on to highlight that this construction was also right as a matter of policy. There was a public interest in the publication of the Report. Underhill LJ noted the importance of public bodies being “as open as possible” [24] about their inquiries. Singh LJ added that the public interest was not contingent on the result of any investigation – there was “an important interest in knowing that the [Electoral Commission] had gone about its work properly and conscientiously” [38] notwithstanding the content of the findings.

Comment

The Courts have generally tended to construe public bodies’ incidental powers quite narrowly. This decision illustrates how matters of policy can be a relevant factor when considering how to interpret such powers; a strong public interest may favour a broad interpretation. Public bodies considering the remit of their express and implied powers should bear this in mind and take the public interest of their proposed actions into account. Those dealing with public authorities should be similarly aware of this factor and note that the full extent of the authority’s powers will not necessarily be set out in the relevant statute.

This decision is also another example of the Court balancing the broader public interest against the impact on specific individuals. In particular the Court is likely to lean in favour of the public interest when considering public bodies publishing their findings on an issue of public importance. Although Vote Leave submitted that the press publicity from the Report was prejudicial, the Court was very clear that this did not outweigh the public interest in publication.

Andrew Lidbetter
Andrew Lidbetter
Partner
+44 20 7466 2066
Nusrat Zar
Nusrat Zar
Partner
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Jasveer Randhawa
Jasveer Randhawa
Of Counsel
+44 20 7466 2998
Anisa Kassamali
Anisa Kassamali
Associate
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Watt’s the issue here? High Court dismisses challenge to Government smart meter programme

In R (on the application of Utilita Energy Ltd v Secretary of State for Business, Energy & Industrial Strategy [2019] EWHC 2612 (Admin), the High Court dismissed Utilita Energy Ltd (Utilita’s) application for judicial review of three decisions relating to the Government’s smart metering programme.

Key Points

  • Public authorities are entitled to delay public consultation on matters where they lack the necessary information to proceed.
  • Wider policy objectives can be taken into account when determining if a public authority has given due regard to specific factors, even if those policy objectives are broad and high level.

Background

The Smart Metering Implementation Programme (“SMIP”) set out the Government’s policy that every British home should have a smart electricity meter by the end of 2020, in order to encourage greater energy efficiency and facilitate switching to cheaper tariffs. Unlike first generation smart meters (“SMETS1”), second generation meters (“SMETS2”) are not tied to a particular supplier’s operating system, meaning customers can switch suppliers without losing smart functionality. Some SMETS1 meters are eligible to be enrolled in a universal communications system run by the Data Corporation Company (“DCC”), which means that they do not require a replacement with SMETS2 to gain interoperability.

The Government imposed a duty (the roll-out duty) requiring energy suppliers to take all reasonable steps to ensure that all SMETS1 meters are either DCC enrolled or upgraded to SMETS2 on or before 31 December 2020. This duty required a change to the standard licence conditions for gas and electricity suppliers.

The Government’s decision followed the issuing of two consultation papers in April 2018. The first dealt with achieving interoperability via the roll-out-duty whilst the second discussed whether the DCC should offer enrolment services to four of the six brands of SMETS1 meters. The two other SMETS1 brands, which include the ‘Secure’ meter, were not considered at this point but the Government noted its intention to consult on these once it had sufficient commercial and technical information available.

The Claimant, Utilita, is an energy supplier which uses Secure meters. Utilita’s customer base consists largely of pre-payment customers, who are more likely than other customers to be elderly, disabled, or from a low-income background. Utilita sought to challenge three Government decisions relating to SMIP:

1). The 4 October 2018 decision to modify the standard licence conditions in order to impose the roll-out duty (the First Decision);

2). The 4 October 2018 decision that SMETS1 meters installed after March 2019 would not count towards an energy supplier’s installation target (“the Second Decision”);

3). The 23 May 2019 decision that the DCC should be required to provide services to the type of SMETS1 meters used by Utilita (“Secure Meters”) in order to enrol them (“the Third Decision”).

Judgment

Utilita sought to challenge the decisions on the grounds of irrationality because the Government had left it in a materially different position to suppliers who, by virtue of using the four DCC-eligible brands, knew for a fact that they were not required to replace their SMETS1 meters by the end of 2020. Utilita argued that since the need to replace the SMETS1 meters was contingent on there being no option to enrol with the DCC, all consultations should have occurred simultaneously.

Lewis J rejected Utilita’s submissions. Suppliers using eligible brands were in a different factual position by virtue of the level of information the Government had on these brands. The Government had made clear its proposal to consult later on Secure Meters once it had the relevant information. The Government’s decision to require mandatory SMETS1 enrolment or replacement within a specified timeframe, and to consult on DCC enrolment only when it had sufficient information was neither irrational nor unlawful; it was a regulatory policy decision within the Secretary of State’s discretion. As a matter of law consultations on decisions which are linked do not need to proceed at the same time. The Court held that the fact that decisions could have been taken differently or in an alternative order did not render them irrational or unlawful.

Utilita’s attempt to challenge on the grounds of inadequate consideration of SMIP’s environmental impact also failed. Lewis J noted that Section 3A(5)(c) Electricity Act 1998 required the Secretary of State to “have regard to the effect on the environment of […] the provision of smart meter communication service”. This duty had been met as the Government’s underlying policy objective was the promotion of more efficient energy use. The Government’s broad policy objective was sufficient to prove that it had considered its specific duties under the Act.

The Court further rejected Utilita’s submission that the Government had breached its duties under s.149 Equality Act 2010 requiring the consideration of individuals with protected characteristics. 93% of Utilita’s customer base were on pre-payment plans and were statistically more likely to fall into these categories. In reaching this conclusion the Court confirmed that the Government must have regard to the need to consider those with protected characteristics, but is not duty bound to achieve a specific result. Lewis J noted that the Government had clearly factored in considerations about the benefits to consumers generally, which included those with protected characteristics, and had considered pre-payment customers specifically.

The submission that the Government, whilst calculating the cost-benefits of the Third Decision, made material errors of assessment and factored in irrelevant considerations was also rejected. Utilita failed to establish any public law error in the Government’s approach to the calculations. In any event Lewis J considered, under section 31 of the Senior Courts Act 1981, that the outcome would not have been substantially different if the costs Utilita wanted had been included, as there was still a calculable net cost-benefit to the policy.

The High Court dismissed Utilita’s claim for judicial review of the First and Second Decisions on all grounds. The Court also held that there were no arguable grounds for challenging the Third Decision’s validity and therefore refused permission for that aspect of the challenge.

Comment

The decision reflects the wide discretion afforded to the Government on matters of consultation and policy. Even though replacing SMETS1 meters was contingent on them not being enrolled in the DCC scheme, the Government had no duty to consult on these issues simultaneously. The Claimant was able to identify various aspects of the decisions that could have been done differently, such as the timing of consultations and the matters to be included in the cost-benefit calculations. However such arguments will not usually be sufficient to justify the court overturning the decision of a public body.  A claimant needs to identify a matter that has been dealt with unlawfully rather than simply one which could have been done differently. The case therefore serves as a reminder of the difficulties in challenging decisions made following a thorough consultation process and where broad policy objectives are involved.

 

Andrew Lidbetter
Andrew Lidbetter
Partner
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Nusrat Zar
Nusrat Zar
Partner
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Jasveer Randhawa
Jasveer Randhawa
Of Counsel
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London-wide ban on Extinction Rebellion protests quashed by High Court

Last week the High Court handed down its judgment on the high profile judicial review brought against the Commissioner of Police for the Metropolis by a number of activists and politicians who support Extinction Rebellion (XR), the environmental pressure movement.

The decision challenged was that of Superintendent Duncan McMillan taken on 14 October 2019 to impose a condition on the “Extinction Rebellion Autumn Uprising” (XRAU) that any assembly linked to the XRAU must “cease their protest(s) within London (MPS & City of London Police Areas)…” by 9pm that evening (the “Condition”). The Condition was subsequently removed on 18 October 2019.

The matter was dealt with by the Court at an expedited hearing, which addressed preliminary issues regarding standing and permission and the substantive questions of i) whether there was power to impose the Condition (pursuant to section 14(1) of the Public Order Act 1986), ii) if so, whether the Condition was so uncertain in its effect that it was unlawful and iii) what relief, if any, ought to be granted.

Who can bring the claim? A ‘critical’ examination by the High Court

It was common ground that the Third, Fourth and Seventh Claimants had standing to bring the claim, being two individuals who had been arrested for breaching the Condition and one organiser for an XR group who facilitated the removal of ‘lost and found items’ from Trafalgar Square following the imposition of the Condition.

However, the question arose as to whether the rest of the Claimants met the usual test of having “sufficient interest in the matter…” to apply for judicial review of the decision. This is a case specific test and, in the circumstances where there were other Claimants who did have standing and could address the substantive issues, the Court noted it will “examine more critically” the claims of others claiming standing.

The importance of ensuring that those who bring claims for judicial review are limited to those best placed to bring the claim was emphasised in the Judgment, not least because of the potential for additional claimants to increase the costs of the litigation. This serves as an important reminder to claimants considering launching or joining ‘public interest’ judicial review claims. On the facts, there was no evidence that this second group of Claimants had been deterred from protesting and the Court found they did not have a sufficient interest to bring the claim.

Was XRAU a ‘public assembly’? Interpreting section 14(1)

The Court found that the XRAU was not a ‘public assembly’ at which Superintendent McMillan was present and therefore it followed that there was no power to impose the Condition under section 14(1) of the 1986 Act. Both sides relied on a ‘natural interpretation’ of the relevant provision but in its judgment, the Court focused on surrounding wording in the 1986 Act and relevant definitions to reach its conclusion. The assisting provisions that the Court considered included references to the ‘senior police officer’ being present “at the scene” and an ‘assembly’ taking place at a location to which the public has access and “is wholly or partly open to the air”, as opposed to a series of separate locations, as was the case with the relevant XRAU gatherings.

Conclusion

In light of the above finding, the Court considered it was not necessary to go on and decide whether the Condition was sufficiently certain so as to be lawful. It therefore quashed the original decision to impose the Condition on the basis that there had been no power to impose it.

Andrew Lidbetter
Andrew Lidbetter
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+44 20 7466 2066
Nusrat Zar
Nusrat Zar
Partner
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Jasveer Randhawa
Jasveer Randhawa
Of Counsel
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Claire Hall
Claire Hall
Associate
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