Actions speak louder than words – how deferential will the courts really be to sanctions decisions made by the Government?

September 7, 2023

In Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs [2023] EWHC 2121 (Admin), the High Court commented that questions of evidence concerning designating specific individuals under the sanctions regime were not entirely questions of foreign policy on which the court is unqualified to form a view, nor a subject on which the court should necessarily be slow to interfere on grounds of institutional competence. Nonetheless, the court went on to dismiss the challenge to the claimant’s designation.

Key Points

  • Matters relating to foreign policy and national security will often attract the broadest margin of discretion for the executive. However, the court must consider closely the particular question that falls for decision so as to gauge the extent to which it should defer to the expertise of the Secretary of State and the extent to which it can itself form a judgment.
  • Whether the evidence supports the contention that designation could contribute to achieving relevant objectives is not entirely a question of foreign policy on which the court is unqualified to form a view, nor is it a subject on which the court should necessarily be slow to interfere on grounds of institutional competence.
  • Ultimately the executive remains best placed to assess the effectiveness and appropriateness of different methods of achieving its objectives and the court will be reluctant to second guess those decisions.

Background

The claimant, a British citizen, challenged decisions of the Foreign Secretary to “designate” him as being subject to an asset freeze under the sanctions regime which addresses the Russian invasion of Ukraine: the Russia (Sanctions) (EU Exit) Regulations 2019 (the “2019 Regulations“), made under s1 of the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA“). SAMLA ss38-40 provide for court review of, inter alia, designation decisions, and in determining whether a decision should be set aside, the court is required to apply the principles applicable on an application for judicial review.

There were two bases for the claimant’s designation:

i) there are reasonable grounds to suspect that the claimant is associated with a person (Mr Roman Abramovich, who was himself designated last year) who is, or has been, involved in obtaining a benefit from, or supporting, the Government of Russia; and

ii) there are reasonable grounds to suspect that the claimant himself is, or has been, involved in obtaining a benefit from, or supporting, the Government of Russia through working as a non-executive director of Evraz plc, an entity carrying on business in sectors of strategic significance to the Government of Russia.

The claimant challenged the designation on human rights grounds, including alleging that there had been a disproportionate interference with his rights under Article 8 (right to private and family life) and Article 1 of the First Protocol (“A1P1“) (right to peaceful enjoyment of possessions) of the European Convention on Human Rights (“ECHR“).

The claimant gave evidence describing the significant impact of the designation on his and his family’s life, including his children losing their places at UK schools, his ability to conduct his businesses being destroyed, no longer being able to access financial institutions he has used for many years, his two private aircraft being grounded, and being unable to pay the expenses necessary to ensure his private yacht is safe.

Judgment

There was no doubt there had been a significant restriction on the claimant’s Article 8 and A1P1 rights and the question was therefore whether the restriction was proportionate.

The court assessed the designation against each element of the proportionality test: (i) whether its objective is sufficiently important to justify the limitation of a fundamental right; (ii) whether it is rationally connected to the objective; (iii) whether a less intrusive measure could have been used; and (iv) whether, having regard to these matters and to the severity of the consequences, a fair balance has been struck between the rights of the individual and the interests of the community.

The claimant agreed that the first element was met since the objective of the statutory scheme of “encouraging Russia to cease actions destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine” is of the greatest importance and in principle justifies the limitation on the fundamental rights of those affected. The claimant did not dispute that the regime as a whole was proportionate, but argued that that did not mean this particular designation was proportionate.

Before considering the other elements of the test, the court considered the degree of deference that it should afford to the Secretary of State in making decisions under the 2019 Regulations. Although accepting that matters of foreign policy may require special weight to be given to the executive’s judgment, the court emphasised that when looking at whether ECHR rights have been infringed there is no “forbidden area” or constitutional bar on the court making all necessary inquiries. Noting the impact on the claimant’s ECHR rights, the court was in no doubt that it should apply “close scrutiny” in order to reach its decision, and considered itself well placed to judge the reasonableness of the analysis on how far the evidence supports the contention that designation of the claimant contributes to achieving the relevant objective. This was not entirely a question of foreign policy on which the court is unqualified to form a view, nor was it a subject on which the court should necessarily be slow to interfere on grounds of institutional competence. However, the court will still respect the special constitutional competence of the Secretary of State, and will limit itself to asking whether the decision was one properly open to the executive rather than acting as a primary decision maker.

Garnham J considered the evidence relating to the claimant’s association with Mr Abramovich, and concluded that both bases of the designation were well founded. In relation to the Secretary of State’s suggestion that designation of the claimant would incentivise him to put pressure on Mr Abramovich to encourage President Putin to cease or limit Russian actions in Ukraine, the likelihood of one oligarch influencing the behaviour of another was said to be one of those areas of decision making where the Secretary of State is better able to assess the evidence than the court is. The identification of levers of pressure by which to influence the Government of Russia’s decision-making, and the weight to be attached to different potential courses of action, is a matter of foreign policy in respect of which the Secretary of State has institutional expertise and is entitled to considerable respect. There was therefore a rational connection between the measure and the objective.

On the question of whether a less intrusive measure could be used, Garnham J again considered this to be an area where the courts have to defer to the judgment of the Secretary of State, since the relative effectiveness of different measures was not an area in which the court could second guess the Foreign Office.

Finally, in relation to whether a fair balance had been struck, the court accepted the Secretary of State’s evidence as to the conscientious regard that had been had to the impact of designation on both the claimant and his family. In view of the objectives involved here being of the highest order, the court could not say that a fair balance had not been struck.

Comment

As in other specialist areas, judicial review claimants will face a high hurdle when seeking to overturn public law decisions in sensitive areas of policy. Foreign policy and national security are traditionally among the areas where the Government is given an especially broad margin of discretion. Although here the court was keen to emphasise that it had an important role to play and was able to properly assess the quality of evidence and the various limbs of the proportionality test, rather than simply taking a completely hands off approach, its actual findings repeated the position that the Secretary of State was better placed to make judgments on such issues than a judge. Even applying the necessary close scrutiny in light of the significant impact on the claimant’s life and the undoubted interference with his ECHR rights, the high threshold for overturning such a decision was not met.

Regardless of the court’s willingness to consider the evidence in detail (rather than affording undue deference to the decision maker), the reality will often be that a judicial review court is simply not best placed to go behind the decisions of bodies with expertise and experience in sensitive policy areas.

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Courts consider public authorities’ duty to consult

August 14, 2023

Two recent judgments relating to consultation outline the fact and context specific nature of this area. In one decision, the Court of Appeal overturned the High Court’s finding that the Government’s National Disability Strategy was unlawful on the basis that the voluntary exercise undertaken did not meet the requirements of a fair consultation (R (on the application of Secretary of State for Work and Pensions) v Eveleigh [2023] EWCA Civ 810). In the second decision, the High Court found that the Secretary of State for Business and Trade failed to comply with his statutory duty to consult (R (on the application of ASLEF and ors) v Secretary of State for Business and Trade [2023] EWHC 1781 (Admin).

Key points

  • The common law requirements of a fair consultation are based on the assumptions that a public authority is proposing a specific decision which is likely to have some impact and that is at a sufficiently crystallised stage to allow the public authority to provide sufficient information to enable consultees to respond intelligently and provide views which might influence the decision.
  • If these assumptions are not present, then the proposal cannot be said to conceivably be the subject of a consultation to which the common law requirements of a fair consultation apply.
  • A statutory duty to consult cannot be satisfied simply provided there was consultation at some point before the making of any regulations, but regardless of the time elapsed since, or the quality of, the consultation.
  • A fresh decision does not necessarily require a fresh consultation, so long as evidence shows that the decision was informed by the views and the evidence of bodies which were representative of the interests concerned.
  • In assessing whether there is a duty to consult further on a proposal, a court will take into account the lapse of time, the developments in the intervening period, the reasons why the proposal was not originally implemented, and any new reasons for wanting to implement it.

R (on the application of Secretary of State for Work and Pensions) v Eveleigh

Background

This was an appeal from a High Court judgment which allowed an application for judicial review of the National Disability Strategy (the “Strategy“) published by the Secretary of State for Work and Pensions (the “SoSWP“) in July 2021.

The claim related to an online UK Disability Survey (the “Survey“) published by the Cabinet Office’s Disability Unit in January 2021, for the purpose of collecting responses to inform the creation and implementation of the Strategy. Various government press releases outlined an intention for the Strategy to be built on improved data and evidence, engagement from disabled people and insight from lived experiences, and described the Survey as “part of our ongoing consultation”.

The High Court found that there was no duty to consult but, in carrying out the Survey, the SoSWP voluntarily embarked on a consultation exercise to which the common law requirements of fair consultation applied, as outlined in R v Brent London Borough Council ex p Gunning (1985) 84 LGR 168 (“Gunning“), namely that: (1) the consultation must be at a time when the proposals are still at formative stage; (2) the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response; (3) adequate time must be given for consideration and response and (4) the product of the consultation must be conscientiously taken into account in finalising any proposals. The Survey was found to have breached the second criterion because the consultation documentation provided insufficient information and precluded proper and effective response. The High Court consequently declared that the Strategy was unlawful.

Judgment

The Court of Appeal overturned the High Court’s decision that the Survey was a consultation to which the Gunning criteria applied. In the court’s view, the Gunning criteria are based on the following assumptions about the characteristics of the consultation exercise to which they are able and intended to apply:

  • a public authority is proposing to make a specific decision which is likely to have a direct (and usually adverse) impact on a person or on a defined group of people;
  • the proposal is at a sufficiently ‘formative’ stage so that the views of those consulted might influence it; and
  • the proposal has crystallised sufficiently that the public authority knows what the decision may be, and is able to explain why it might make that decision in enough detail to enable consultees to respond intelligently to that course of action.

The court held that the Strategy was not comparable to previous decisions engaging the Gunning criteria. It was a series of general policy commitments at a high level of abstraction, and so was not obviously the type of intended decision to which the Gunning criteria could apply. Further, at the time the Survey was released, the Strategy had not reached a stage at which it could conceivably be the subject of a consultation – it was no more than an inchoate plan which would take shape as and when information was gathered by the Survey. As such, there was no concrete proposal to which the Gunning criteria could apply. The purpose of the Survey was simply to give respondents the opportunity to influence the future content of the Strategy with information and their views.

In light of the court’s decision on this point, it declined to consider a further issue raised by the Government as to whether the Gunning criteria apply to voluntary consultations. The received wisdom is that a voluntary consultation attracts the Gunning requirements. The Secretary of State suggested that whilst the point has been assumed to be correct in many authorities, it has never been the subject of argument, or decision, and submitted that a voluntary consultation should only be subject to control via the principle of rationality. Notably, the judges offered differing perspectives on whether a voluntary consultation should be subject to the same rules as one which a public authority is legally obliged to conduct, but left the issue for a future case.

R (on the application of ASLEF and ors) v Secretary of State for Business and Trade

Background

In three joint claims, 13 trade unions challenged the decision of the Secretary of State for Business and Trade (the “SoSBT“) to make the Conduct of Employment Agencies and Employment Business (Amendment) Regulations 2022 (the “2022 Regulations“).

The 2022 Regulations revoked regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (“Regulation 7“). Regulation 7 made it a criminal offence for employment businesses to knowingly introduce or supply workers to an employer to carry out the work of employees who were taking part in official industrial action.

In 2015, the Government conducted a public consultation on a proposal to revoke Regulation 7, to which the majority of responses did not favour changing the law and in 2016 it was decided not to go ahead with the proposal. Despite this, in 2022, the Government decided to revoke Regulation 7 (via the 2022 Regulations) without further public consultation, in response to ongoing industrial action in the rail sector and other anticipated industrial action.

The claimants sought judicial review on two grounds:

  • The SoSBT failed to comply with his statutory duty, under section 12(2) of the Employment Agencies Act 1973 (the “1973 Act“), to consult with representative bodies before making the 2022 Regulations.
  • The SoSBT breached his duty under Article 11 of the ECHR to prevent unlawful interference with the rights of trade unions and their members.

In relation to consultation, the SoSBT relied on the 2015 consultation as evidence that his duty was met.

Judgment

The High Court upheld the claim and quashed the 2022 Regulations.

The court engaged in a discussion of the interpretation of s.12(2), noting that Parliament cannot have intended s.12(2) to be satisfied provided there was consultation at some point before the making of any regulations, but regardless of the time elapsed since, or the quality of, the consultation. In actual fact, the Gunning principles set out what Parliament required when it referred to “consultation” in s.12(2). The relevant question was whether the SoSBT’s approach to the consultation was so unfair as to be unlawful, not what the court itself would have done or what the standards of perfection were. However the court did not accept the submission that the court is required to afford considerable deference to the SoSBT’s decision as to whether a change in circumstances is such as to require further consultation i.e. to defer to the views of the decision-maker as to what fairness required. That would be so in a case where the test was one of rationality.

Against that background, the court accepted that a fresh decision by a different Secretary of State did not necessarily require a fresh consultation, as the responses might still be current years later, and the aims of s.12(2) might be achieved by conscientious consideration of those responses, although the lapse in time would make this less likely. However, in this case the court found no evidence that the SoSBT’s decision was in fact informed by, or tested against, the views and the evidence of bodies which were representative of the interests concerned, whether expressed in 2015 or 2022. The aims and requirements of s.12(2) therefore were not fulfilled because there was no consultation before the 2022 Regulations were made.

Although the claim succeeded on the above basis alone, the court proceeded to consider the lawfulness of the SoSBT’s decision not to consult further. Even if the SoSBT had conscientiously considered the responses to the 2015 consultation, the court found his approach to making the 2022 Regulations to be contrary to s.12(2), so unfair as to be unlawful, and irrational. In the court’s judgment, it was unfair and inconsistent with the aims of s.12(2), particularly to ensure informed decision making, to fail to at least seek updated views and evidence given: (i) the lapse of time; (ii) the developments which there had been in the intervening period; (iii) the reasons why the proposal had not been implemented after the 2015 consultation; (iv) and the professed reasons for wishing to implement it in 2022.

The court declined to express a view on ground two.

Comment

Both these cases are interesting for demonstrating how far the courts are willing to hold public authorities to standards of fairness in a consultation process. Eveleigh potentially signals a rowing back from the general acceptance that a consultation exercise, even if voluntary, must comply with specific minimum criteria, albeit that the court reached this conclusion by deciding that the exercise did not in fact amount to a consultation at all rather than focusing on its voluntary nature. ASLEF demonstrates that the courts will look at the question of fairness for themselves and will not afford the same degree of deference to public authorities as in more substantive decision making.

Andrew Lidbetter
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Nusrat Zar
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When can a public authority withdraw its own decision?

May 30, 2023

In R. (on the application of Piffs Elm Ltd) v Commission for Local Administration in England [2023] EWCA Civ 486, the Court of Appeal considered the withdrawal of a decision by the Local Government Ombudsman (the “Ombudsman“), and in doing so, provided useful commentary regarding the limits of a public authority’s implied powers.

Key Points

  • When a rule-making power is conferred by Parliament, then, absent a contrary intention, Parliament also impliedly confers a power to rescind or revoke the rule.
  • However, if Parliament confers a function on a body or on an office holder, the provision conferring that power does not impliedly confer a power to rescind or revoke an earlier exercise of that function, even if the earlier exercise was legally flawed.
  • In such cases the proper remedy is judicial review.

Background

The dispute arose in the context of the claimant developer’s three failed applications for planning permission to Tewkesbury Council (the “Council“). The refusal of the second planning application was judicially reviewed, and the court found that there was an appearance of bias. The Council stated that they would address the appearance of bias but noted that Piffs Elm would not receive a refund for the fee associated with any further planning applications. Nonetheless, Piffs Elm proceeded to make a third application which the Council refused to determine, and it did not refund the application fee (the “Fee“). Piffs Elm subsequently made a complaint of maladministration to the Ombudsman.

The current proceedings involved a challenge to the following three decisions which stemmed from the events above:

  • the final report issued by the Ombudsman on 22 August 2019 (“D1“);
  • the Ombudsman’s decision on 14 November 2019 to withdraw D1 (“D2“); and
  • the final report issued by the Ombudsman on 3 February 2021 (“D3“).

In D1, the Ombudsman found fault with the Council because it did not consider exercising its discretion to refund the Fee. After taking legal advice, the Ombudsman concluded in D2 that D1 was legally flawed, and decided that he would re-open the investigation, withdraw D1 and issue a new report. The Ombudsman then issued D3, which concluded that the Council had not acted with fault as it was not clear whether the Council in fact had a discretion to refund the Fee. The High Court rejected Piffs Elm’s application for judicial review of the Ombudsman’s decisions, dismissing the argument that the Ombudsman had no power to withdraw D1 and the challenge to D3.

Judgment

The issues on appeal were whether:

  • the Ombudsman had the power to withdraw D1 (“Issue 1“);
  • if not, whether D1 was unlawful (“Issue 2“); and
  • if so, whether D3 was unlawful (“Issue 3“).

Issue 1

As it was accepted that there was no express power to withdraw D1, the main question was whether the Ombudsman had an implied power to withdraw D1. Laing LJ held that the correct approach was to ask whether the implication was necessary rather than convenient. The Court of Appeal found that it was not necessary to imply a power to withdraw the report in the context of this particular statutory scheme which contained a complete code. The court noted that the Ombudsman had many opportunities to consider arguments and information, including whether his investigation was complete, before reaching his decision. Consequently, it would have been unfair to the ‘winning’ party to have their decision swapped for a less favourable one, especially since there would be no time limit on the exercise of such an implied power.

The court considered that the only source of an implied power to withdraw a report would be contained in sections 12 and 14 of the Interpretation Act 1978, which deal with the continuity of powers and the implied power of statutory bodies and office holders. Sections 12 and 14 of the 1978 Act were said by Laing LJ to be an exhaustive statement of the circumstances in which Parliament has conferred an implied power to revoke an earlier exercise of a function. The provisions are clear that when a rule-making power is conferred, then, absent a contrary intention, Parliament also, by implication, confers a power to rescind or revoke the rule. However, since section 12 says nothing about revocation, it is also clear that if Parliament confers a function on a body or on an office holder, the provision conferring that power does not confer, by implication, on that body or office holder a power to rescind or revoke an earlier exercise of that function. The court noted that the ramifications of conferring an implied power via section 12 could not be limited to the specific scenario in question, as section 12 does not explain the context in which a power could be implied or the limits of any such power. Therefore, the court concluded that section 12 did not confer an implied power to revoke D1 and the parties should have sought judicial review of the legally flawed decision. To allow the Ombudsman to withdraw simply because he believes that his decision was unlawful would deprive the parties of the opportunity to go to court and have the matter decided by an independent arbiter, and of the procedural protections which apply on an application for judicial review.

Issue 2

As the Ombudsman had no power to withdraw D1, the court considered whether D1 was unlawful, concluding that the Ombudsman did not have jurisdiction to decide whether the Council had discretion to refund the Fee, as this was a question of law that should have been decided by the court.

Issue 3

The court held that the Ombudsman was correct to conclude that he had no jurisdiction to consider Piffs Elm’s complaint in relation to the Fee, which essentially raised two legal questions rather than being a complaint about an administrative act.

In summary, the court held that D1 was unlawful, D2 was unlawful because the Ombudsman had no power to withdraw D1, but D3 was lawful because the Ombudsman had no jurisdiction to consider questions of law. Therefore, Piffs Elm’s appeal was dismissed, despite successfully arguing that D2 was unlawful.

Comment

Although this case focuses on the lawfulness of the Ombudsman’s decisions and the scope of his powers, it also provides useful guidance for public authorities when publishing reports or final decisions. Public authorities should carefully consider all information and arguments before them in advance of publishing any decision, as the power to revoke a report will not easily be implied in the absence of an express power.

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Timing is everything – Finding of undue delay emphasises extreme urgency may be required in commencing judicial review proceedings

May 4, 2023

In R. (on the application of British Gas Trading Ltd) v Secretary of State for Energy Security and Net Zero [2023] EWHC 737 (Admin), the High Court refused permission for judicial review where challenges to decisions made by the Secretary of State (“SoS“) regarding the transfer of the business of Bulb Energy to Octopus Energy were brought within a matter of weeks. The Divisional Court found there had been undue delay in bringing the applications for judicial review, but in any event would have dismissed the challenges, which were based on public law principles and on alleged non-compliance with the subsidy control principles, on their substance.

Key points

  • The Court emphasised the importance of strict time limits in judicial review proceedings in order to protect the public interest in good administration.
  • While accepting that the Administrative Court is not normally suited to determine disputes of facts, the Court noted that the judicial review procedures are flexible enough to accommodate such disputes if necessary.
  • The Court reiterated that the Administrative Court will adopt a light touch standard of review in the commercial context where the decision makers have particular expertise.

Background

In 2021, Bulb, an electricity and gas supply company with around 1.5 million customers, ran into serious financial difficulties. On 24 November 2021, an Energy Supply Company Administration Order was made by the High Court, and Joint Energy Administrators (the “JEAs“) were appointed. The JEAs conducted a sale process to sell Bulb’s business. All three claimant energy companies engaged in the early stages of this process, although only British Gas Trading (“BGT“) made an indicative offer. At that stage, Octopus made it clear that they would not be making a bid, but subsequently re-entered the process and put forward a bid.

Having considered the position, the JEAs recommended that the bid from Octopus should be accepted. The SoS commissioned an independent review of the JEAs’ final recommendations, and also received various assessments concluding that the terms of the Octopus transaction did not contravene the subsidy control principles set out in the EU/UK Trade and Co-operation Agreement (“TCA“). On 29 October 2022, the Government announced its approval of Bulb’s acquisition by Octopus and referred to the fact that it involved government funding.

At a hearing in the Chancery Division on 11 November 2022 for an order fixing the effective date of the transfer, BGT raised concerns about the government funding and asked for time to seek further information and consider judicial review proceedings. The hearing was adjourned for this purpose. BGT issued judicial review proceedings 17 days later, on 28 November 2022, followed by the other claimants one day later.

Judgment

Undue delay and other procedural issues

Singh LJ and Foxton J emphasised the public and private interests in bringing judicial review proceedings promptly and without undue delay, as stated in the Administrative Court’s Judicial Review Guide (2022), and referred to previous case law highlighting that in the financial field, a delay of even a few days may be highly detrimental to the interests of third parties and good administration. The court stated that the urgency of the situation was and certainly should have been appreciated much earlier, and considered “disingenuous” the claimants’ statement that they only first appreciated an urgent application might be necessary on 24 November 2022, in circumstances where BGT raised points in the Chancery hearing on 11 November about the complications of trying to reverse the transaction. While judicial review proceedings should not be commenced before adequate information justifying the proceedings has been obtained, the court highlighted that it is of the utmost importance that proceedings should be commenced very speedily, and stressed that a claimant does not need to have full disclosure in order to launch judicial review proceedings, as it is usually the grant of permission that triggers the duty of candour.

Whilst the court did not suggest that judicial review applications should be started based on press reports, here, the substance of the two grounds advanced were essentially known to the claimants from early November, which meant that the judicial review proceedings should have been started much earlier. The claimants could have later amended the grounds following disclosure to flesh out the details.

In response to the claimants’ reliance on the need to send pre-action letters as a partial explanation for the delay, the court stated that in very urgent cases it is not necessary for there to be a pre-action protocol letter. In doing so, it referred to the provisions in the Administrative Court Guide suggesting that where full compliance with the pre-action protocol is not possible, the parties should try to comply to the fullest extent possible without putting the time limits for starting the case in jeopardy. In any event, the court noted that BGT’s pre-action letter was not sent until 10 days after the Chancery Division hearing, which in this context was not sufficiently prompt.

The court also had to consider the approach to issues of fact. Noting that the processes of the Administrative Court are not usually well suited to resolving disputes of fact, the judgment recognised that the procedures are flexible enough to accommodate the determination of factual disputes. This case was unusual in the amount of disclosure by the SoS and Interested Parties, which allowed the court to reach clear conclusions on the background facts, although the court was careful not to suggest that such an enquiry is necessary or appropriate in judicial review generally. Where, as here, no order is made for cross-examination of witnesses, the defendant’s evidence will usually be assumed to be correct unless there is material before the court indicating otherwise. BGT argued that this principle did not extend to the evidence of the Interested Parties, but the court was not persuaded that the evidence of the Interested Parties was in any different category to that of the SoS from this perspective.

The public law grounds

Under the public law grounds, the claimants alleged that the process leading up to the decisions was unfair because the claimants were not provided with the opportunity and information by which they could make a bid knowing that there was a subsidy available.

The court expressed its view that the commercial context was important here because it required the court to perform a relatively “light touch” intensity of judicial review, as compared to, for example, a matter concerning the liberty of an individual, in which a more intensive scrutiny would be called for. Other features of the relevant statutory scheme also indicated that the light touch intensity was appropriate, such as the fact that the JEAs were experts in their field who had access to expert advice. Further, the statutory regime specifically provided that the management by the JEAs must be carried out for the purpose of achieving the objective “as quickly and as efficiently as is reasonably practicable”. This was considered by the court to be a very important part of the statutory context in which the present case must be decided, in particular, whether and to what extent the duty to act fairly applies.

The court rejected the claimants’ arguments in relation to procedural fairness, finding that there was no duty to consult in this situation, and was not persuaded by the criticism that the SoS had regard to irrelevant considerations, or failed to have regard to relevant considerations. None of the public law grounds were considered arguable.

The subsidy control grounds

The other substantive element to the claimants’ case was that the SoS had failed to meet the requirements of the subsidy control principles set out in the TCA, as implemented in domestic law by the European Union (Future Relationship) Act 2020.

The claimants argued that, in order to implement Article 366 of the TCA, the ground of judicial review available should not be confined to the conventional principle of rationality but must include the principle of proportionality. In the court’s view, the TCA does envisage that the principle of proportionality must be complied with in the subsidy control regime, but when it comes to applying the principle of proportionality, the context is very important such that in practice the outcome may not be materially affected by the distinction between the concept of rationality and the principle of proportionality. This is consistent with the approach taken in applying the principle of proportionality under the Human Rights Act 1998, i.e. no matter how intense the standard applied, a court of review is not entitled to substitute its own decision for that of the constitutional decision-maker. An enhanced margin of appreciation will be given by the courts when reviewing the decisions of the executive in a context involving scientific, technical and predictive assessments and, even in the context of EU law, and even applying the principles of State Aid law (which are no longer directly applicable), a wide margin of judgment was to be afforded to a public authority when considering commercial circumstances in the private market.

Ultimately, if it had not been for the undue delay, the court would have granted permission on the Subsidy Control grounds under the TCA but would have rejected those grounds on their merits.

Comment

This decision provides a stark reminder that judicial review proceedings must be brought with the utmost urgency, particularly in cases in which reversing the challenged decision will have significant broader implications. In such cases, a lack of detailed evidence available to the claimant will not persuade the court that delay is justified.

The judgment is also significant as it examines the status of the TCA as an international treaty between the UK and the EU and, as such, its application as a matter of domestic law. Whilst accepting that the standard of review applicable is, in principle, that of proportionality, the court emphasised that the way in which that standard is applied depends on domestic law principles, and is a relatively “light touch” standard of review in this commercial context.

Andrew Lidbetter
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Nusrat Zar
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Jasveer Randhawa
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James Wood
James Wood
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High Court highlights important distinction between policy and legislation, holding exemption to UK GDPR unlawful

April 25, 2023

In R. (on the application of the3million and Open Rights Group) v Secretary of State for the Home Department [2023] EWHC 713 (Admin), the High Court held that the UK Government acted unlawfully in attempting to rely on a policy document as a substitute for a legislative measure to meet the requirements of the UK General Data Protection Regulation (“UK GDPR”) for an immigration-related exemption to the application of data protection rights.

Key points

  • The court accepted that exemptions to the application of UK GDPR rights can only be prescribed via a “legislative measure” which satisfies certain conditions such as being clear, precise, accessible, foreseeable and legally binding.
  • The court’s approach is of general relevance to situations where the Government seeks to use policy documents in a particular context rather than introducing legislation.
  • A policy document is more likely to be insufficient where a measure should be (i) legally binding; (ii) specific; and (iii) subject to Parliamentary scrutiny.

Background

The UK GDPR governs individuals’ rights in relation to their personal data. This case, heard by Saini J, concerned the Government’s second attempt to introduce an exemption (the “Immigration Exemption”) to these rights in cases where data is processed for “effective immigration control” by the Secretary of State (“SoS”). A claim was brought by two non-governmental organisations (the “Claimants”) against the Secretaries of State for the Home Department and for Digital, Culture, Media and Sport (the “Defendants”), challenging this exemption.

Exemptions of this kind are permitted under Article 23(1) UK GDPR, but must comply with the requirements of Article 23(2) UK GDPR. The Immigration Exemption provided that certain UK GDPR rights did not apply to the SoS’ data processing for effective immigration control, subject to the SoS having “an immigration exemption policy document” in place (the “IEPD”). The SoS was required by the Immigration Exemption to “have regard” to the IEPD.

Reliance on the IEPD was introduced after a previous version of the Immigration Exemption was ruled unlawful by the Court of Appeal (R. (Open Rights Group and the3million) v Secretary of State for the Home Department [2021] EWCA Civ 800). That judgment, which was not appealed by the Government, was read by Saini J as confirming that Article 23(2) UK GDPR required an exemption to be introduced through a “legislative measure”. Considering the Court of Appeal’s judgment and other related case law, Saini J summarised Article 23(2) UK GDPR as requiring that exemptions:

  • be made by legally binding legislation;
  • have “clear and precise” content, as well as be “accessible and foreseeable”; and
  • provide substantive and procedural conditions and safeguards.

The Claimants in the present case argued the Immigration Exemption remained unlawful, since its reliance on the IEPD meant it was not a legislative measure and did not satisfy the requirements above, which the judge described as basic Rule of Law requirements.

Judgment

Saini J ruled in favour of the Claimants, holding the Immigration Exemption unlawful. It was common ground between the parties that the IEPD was not a “legislative measure”, and thus could not have itself satisfied Article 23(2) UK GDPR.

Saini J agreed with the Defendants that the Immigration Exemption was sufficiently clear on certain issues even without the IEPD. However, the Claimants’ case succeeded as there was no legislative measure underlying the Immigration Exemption which directed an evaluation of the proportionality of restrictions on data rights (as argued in “Complaint 2”), the implementation of safeguards to prevent abuse or unlawful data handling (as argued in “Complaint 4”), or the appropriate handling of risks (as argued in “Complaint 6”).

The non-binding nature of policies

Saini J’s judgment placed emphasis throughout on the non-binding nature of the IEPD. In addressing Complaint 2, Saini J noted the requirement for proportionality analysis, entailing the balancing of considerations for and against a given restriction on rights. The Immigration Exemption did not include a requirement of this kind. Although the IEPD did require a proportionality analysis, its “non-binding” nature meant it was of no assistance to the Defendants. The requirement needed “to be identified with legislative force in the [amending regulations] themselves”.

A similar issue arose in Saini J’s consideration of Complaint 4 on safeguards. Saini J explained that data subjects would not be able to found a claim for breach of their UK GDPR rights based on any non-adherence to the IEPD by the SoS. Moreover, the SoS was only required to “have regard” to the IEPD, which was described as a “soft obligation in public law terms” and weaker than the public law obligation to act consistently with published policies, underscoring the inadequacy of the Immigration Exemption’s reliance on the IEPD to set safeguards.

Insufficient specificity

Saini J also highlighted the insufficient specificity of the Immigration Exemption’s framework. Again in respect of Complaint 4, Saini J noted how the IEPD failed to dictate the processes which the SoS should have had in place when relying on the Immigration Exception. Saini J commented that “the very wording of the [amending regulations] encourages a generalised, non-prescriptive document”, inadequate for safeguarding data subjects. Complaint 6 was upheld because the Immigration Exemption totally failed to include provisions on addressing the risks to data subjects arising from its use.

Parliamentary scrutiny

Additionally, Saini J’s reasoning was influenced by how the IEPD was not subject to Parliamentary scrutiny. The IEPD could “be changed without formality or any Parliamentary procedure”. Saini J went as far as to say that this meant that Parliamentary scrutiny of the Immigration Exemption itself was “in practice absent“. Whilst the Defendants highlighted the attraction of this point, which they said allowed the policy to be “nimble”, Article 23(2) UK GDPR required legislation or a code “endorsed by Parliament”.

Comment

Saini J’s reasoning is of interest beyond the data protection and immigration contexts. The approach adopted will be of general relevance to other situations where the Government seeks to use policy documents rather than introduce formal legislation. Where statute requires a given result to be achieved through legislation, it will not be open to the Government to justify the use of a policy document instead due to its expedience or flexibility.

In circumstances where the Government increasingly uses policy documents and there are significant constraints on Parliamentary time to pass new legislation, this judgment is a signal from the High Court that the use of vague policy documents which potentially undercut Parliamentary scrutiny will be examined particularly closely.

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Guidance from the Supreme Court on statutory construction emphasises importance of context

March 20, 2023

In R. (on the application of VIP Communications Ltd (In Liquidation)) v Secretary of State for the Home Department [2023] UKSC 10, the Supreme Court considered issues of statutory construction in the context of conflicting legislative provisions, and confirmed that the Secretary of State did not act ultra vires in directing Ofcom to refrain from carrying out its statutory duty.

Key Points

  • This decision provides authoritative guidance on the approach to statutory construction when a public body has apparently conflicting statutory duties.
  • The courts should consider the wider context and purpose of a statutory scheme when considering legislation, to ascertain Parliament’s intention.
  • There is no general principle of statutory construction that, in the absence of clear words, a statutory power to give a direction cannot extend to directing a person not to comply with a statutory duty under the same or another statute.

Background

Section 8(4) of the Wireless Telegraphy Act 2006 (“WTA“) places a duty on Ofcom to make exemption regulations relating to licencing requirements if certain conditions are met. However, Ofcom is also subject to a duty under section 5(2) of the Communications Act 2003 (“CA“) to act in accordance with any direction it receives from the Secretary of State on limited grounds, including national security. This judgment considered whether Ofcom’s duty under section 8(4) of the WTA is overridden by its duty under section 5(2) of the CA. Specifically, the court assessed whether under section 5(2) the Secretary of State could instruct Ofcom not to comply with its duty under section 8(4).

In 2017, Ofcom announced its intention to make regulations under section 8(4) exempting commercial multi-user gateways (“COMUGs“) from licencing requirements. COMUGs are gateway devices that allow calls or text messages to be routed from landlines to mobile networks. The Secretary of State subsequently issued a conflicting direction to Ofcom, under section 5(2) of the CA, not to make the regulations. This direction stemmed from national security and public safety concerns since COMUGs can conceal a caller’s communications data, such as their location and identity.

The claimant telecommunications company sought judicial review of the Secretary of State’s direction. Both the High Court and the Court of Appeal held that the Secretary of State acted ultra vires by directing Ofcom to refrain from making an exemption regulation, as “the court will not construe a statutory power to give a direction as extending to giving a direction not to comply with statutory duties under that or another statute, in the absence of clear words to that effect“, and there were no such clear words in section 5 of the CA.

Judgment

The Supreme Court allowed the Secretary of State’s appeal and dismissed VIP Communications’ application for judicial review. In finding that the Secretary of State did not act ultra vires, the court considered general principles of statutory construction and what Parliament’s intention was when enacting section 5 of the CA.

The court did not agree that there was a general principle of statutory construction that, in the absence of clear words, a statutory power to give a direction cannot extend to directing a person not to comply with a statutory duty under the same or another statute. This case was to be distinguished from cases where a legislative provision is said to override fundamental rights or the rule of law. Where fundamental or constitutional rights are not involved, the normal principles of statutory construction apply. It will be relevant to the assessment of rival interpretations of a provision that, on one view, it would permit a direction to be given that has the effect of precluding the performance of what would otherwise be a statutory duty, but that is no more than one of the factors which will need to be considered in arriving at the proper construction of the provision.

The court noted that the correct approach to statutory construction is to look at the wider context of the legislative scheme and the purpose of provisions within that scheme to ascertain Parliament’s intention. Although the apparently conflicting provisions here appeared in different statutes, they were described as dealing with a single system of regulation, such that they should be construed as if they were contained in a single statute. It was significant that national security is a core function of government, and therefore, such matters are reserved to the Secretary of State by the legislative scheme in section 5 of the CA with the regulator “in no sense equipped to have responsibility for them“. This is reflected in the fact that Ofcom is given no power under the legislation to have regard to national security and cannot refuse to make exemption regulations on that ground itself. Before the CA was enacted, the Secretary of State could refuse exemption regulations based on national security grounds, and the CA subsequently preserved this power by virtue of section 5. Lord Richards observed that the Court of Appeal’s approach to section 5(2) would mean that the Secretary of State has power to direct Ofcom to take some positive step, or to take action in a particular way, but does not have power to direct Ofcom to refrain from taking a particular step where, in the reasonable and proportionate judgment of the Secretary of State, that step would prejudice national security interests. Lord Richards described this as an “improbable reading“.

Comment

This decision provides useful guidance on statutory construction when a public body has apparently conflicting duties, illustrating that outside the area of fundamental and constitutional rights, clear words are not always required to confer a power to override even primary legislation. The judgment highlights the need to interpret legislation with reference to the wider context and overall purpose of the statutory scheme, rather than take a restrictive approach to construction. However, it is worth bearing in mind that the context here was national security, which is an area accepted as being within the province of central government. The court may take a different approach in another context.

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High Court upholds decision maker’s broad discretion in relation to impact of emissions of proposed airport expansion

March 1, 2023

In Bristol Airport Action Network Co-ordinating Committee v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 171 (Admin), the High Court dismissed a challenge brought primarily on climate change grounds by various local environmental groups and residents to the grant of planning permission for the expansion of Bristol Airport.

Key points

  • Planning authorities are entitled to consider in a generalised way whether emissions from a proposed development would materially affect the UK’s ability to meet its carbon budgets and targets.
  • Local decision makers may assume that separate pollution control regimes will operate effectively in respect of the emissions from a proposed development.
  • Aviation carbon emissions are primarily to be considered at a national, rather than local, level in accordance with Government policy.

Background

The first interested party, Bristol Airport Ltd (“BAL“), applied to North Somerset Council (“the Council“) for planning permission to increase its capacity by about 2 million passengers per year. The application was refused by the Council, but BAL’s appeal against that refusal was allowed, following an inquiry by a panel of planning inspectors (the “Panel“).

In relation to climate change issues, the claimant alleged that the Panel erred in:

  1. Its interpretation that the Council’s development plan policies did not directly address aviation emissions;
  2. Its interpretation of the national policy “Making Best – Use of Existing Runways” (“MBU”);
  3. Finding that it was required to “assume” that the Secretary of State (“SoS“) would comply with his duty under the Climate Change Act 2008 (“CCA“), as per paragraph 188 of the National Planning Policy Framework (“NPPF”);
  4. Failing to consider the impact on the local carbon budget for the Council; and
  5. Its conclusion that the impact of non-CO2 emissions could be excluded from the Environmental Impact Assessment (“EIA“) prepared by BAL and should not weigh in the balance against the proposed expansion.

In the alternative, the claimant submitted that the Panel failed to give adequate reasons.

Judgment

Lane J dismissed each of the grounds raised by the claimant, including the reasons challenge. In large part, the case was about the key question underpinning the inquiry (to which there was no substantial dissent): whether emissions from the proposal would be so significant that they would materially affect the ability of the UK to meet its carbon budgets and the target of net zero by 2050.

Ground 1

In relation to Ground 1, the court noted the principle in Tesco Stores Ltd v Dundee CC [2012] UKSC 13, that planning policy statements are not to be construed as statutory or contractual provisions.

Although the relevant policies here were broad enough to encompass the issue of aviation emissions, they did not seek to articulate how the Council should address that issue as a planning authority. Aviation emissions, which can occur at any point during an aircraft’s journey to and from the airport, are clearly of a different character to other forms of emissions that can be reduced in the Council’s own area. The Panel was entitled to conclude that aviation emissions should be addressed “indirectly“, meaning they would only become relevant if they were likely to have a material impact on the SoS’ ability to meet his climate targets and budgets (which the Panel did not consider to be the case here). Aviation emissions were not, therefore, a material consideration against BAL.

Ground 2

The court found that the Panel considered carbon emissions from all sources, including aviation, in detail. Referring back to the key question, the court noted that planning authorities are entitled to make judgments of a generalised nature about the likelihood of a proposal harming the achievement of a national target. The MBU, read as a whole, also showed that the admitted increase in CO2 emissions was a matter for national, not local, decision-making.

Ground 3

The claimant’s main argument was that the Panel erred in law in treating the CCA and the various duties placed on the SoS under it as a “separate pollution control regime” that would operate effectively, relying on the different approach taken in relation to air quality in Gladman Developments Ltd v Secretary of State for Communities and Local Government and others [2019] EWCA Civ 1543.

Lane J explained that the relationships between local and national decision-making in the areas of air quality and emissions from aviation are significantly different, with the latter controlled at the national level pursuant to the CCA, including through trading schemes by contrast to air quality issues which have a significant and discrete local element. Disapplying the assumption in paragraph 188 of the NPPF, that other regimes would operate effectively, would lead local decision makers into an area of national policy with which they are not directly concerned.

Ground 4

The court found that the impact of the proposal on the Council’s local carbon budget was only a consideration “to which the decision-maker may have regard if, in their judgment and discretion, they think it is right to do”, (the third category of ‘relevant considerations’ summarised in R (Friends of the Earth Limited) v Heathrow Airport Limited [2020] UKSC 52 (“Friends of the Earth“).

Given the decision letter demonstrated that the Panel engaged with the issue before concluding that it had no basis in law or policy, and therefore giving it no weight, the claimant failed to overcome the high threshold of irrationality. Lane J reiterated the court’s concern not to adopt a stance which may result in it wrongly substituting its own view on weight for that of the decision-maker.

Ground 5

The claimant submitted that the impact of non-CO2 emissions was a matter of critical importance to determining the impact of the airport’s expansion on climate change and should have been in the environmental statement.

Lane J referred to the “well-established” position that EIA compliance is a matter of planning judgment, challengeable only on a Wednesbury basis. The EIA did not ignore the non-CO2 emissions but noted the uncertain state of scientific knowledge regarding their assessment, and their present exclusion from domestic and international legislation and targets. Accordingly, the EIA did not disclose a ‘patent defect’ that the Panel unlawfully failed to recognise. Applying Friends of the Earth, leaving a matter about which there is scientific uncertainty for further consideration within the development process did not breach the precautionary principle.

Comment

This judgment, which began by acknowledging the “very great importance” of climate change and the international consensus on the need to reduce CO2 emissions, is the latest in a growing line of climate change challenges. In a decision that will be welcomed by the aviation industry, the court afforded a wide margin of discretion to the Panel’s assessment of the impact of the proposed expansion on the ability of the UK to meet its carbon budgets, and reiterated its very limited role as regards to the application of policy and weight to be given to various factors.

The judgment also contains useful guidance on evaluating emissions in EIAs, particularly in respect of non-CO2 emissions. In light of significant scientific uncertainty, it was open to BAL to leave the issues to be dealt with when the science allowed. Scientific developments in this area could shift the dial on the need to address non-CO2 emissions.

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High Court quashes refusal of development consent for energy project

January 24, 2023

Judgment was handed down in the High Court today by Mrs Justice Lieven in the case of R (on the application of AQUIND Limited) v Secretary of State for BEIS and others [2023] EWHC 98 (Admin). Mrs Justice Lieven found in favour of the Claimant, AQUIND Limited, represented by Herbert Smith Freehills LLP. The judgment results in the quashing of the decision of the Secretary of State to refuse development consent for the AQUIND Interconnector.

The proceedings related to AQUIND’s application for development consent to build an electric power cable between the south coast of England and Normandy in France. The cable would have the capacity to transmit approximately 5% and 3% per annum of the total consumption of electricity of the UK and France respectively. The Planning Inspectorate’s examination of its application began in September 2020 and concluded in March 2021. Following the examination, in January 2022, the Secretary of State for BEIS ultimately decided to refuse development consent for the project on the basis of AQUIND’s assessment of an alternative to the proposed route of the cable, located in Mannington, Dorset. This decision was held to be unlawful.

The case centred on the issue of alternatives and the claim was successful on 4 out of 7 grounds, as follows:

  1. Failure to take into account relevant evidence relating to alternatives;
  2. Failure to discharge the duty of the decision-maker to have regard to any relevant national policy statement under section 104 of the Planning Act 2008;
  3. Failure to apply policies in the Overarching National Policy Statement For Energy (NPS EN-1) relating to the assessment of alternatives; and
  4. Breach of the Tameside duty of the decision-maker to take reasonable steps to acquaint themselves with the relevant information so as to be able to discharge their statutory duties.

On the Secretary of State’s failure to comply with the Planning Act 2008 and Overarching National Policy Statement For Energy (NPS EN-1), Mrs Justice Lieven stated that: “If the SoS was going to rely upon the failure to properly consider an alternative, as he did here, then he had to do so applying the policy approach in EN-1 4.4.3; or explaining why he intended to depart from the policy. It is a trite proposition that an applicant for development consent is entitled to rely on policy, particularly in this statutory scheme, an NPS, and if the decision maker wishes to depart from it, he has to explain why.”

In relation to the requirement of the Tameside duty in this case, Mrs Justice Lieven held that the Secretary of State had acted irrationally in failing to make proper inquiries, stating that: “the ExA had found a strong need case in favour of the development which clearly outweighed the harm found. The consequence of this was that in the ExA’s view there was a significant public interest in the development. It should be noted that the Claimant contended, and the ExA accepted, that the development could meet 4-5% of the UK’s electricity need with the obvious public benefits that would follow. The level of this public benefit meant that any reasonable SoS would have inquired into the feasibility and viability of Mannington before rejecting the development on the purely speculative basis that it might provide an alternative to Lovedean.”

The decision as to whether to grant Development Consent for the AQUIND Interconnector will now be remitted back to the Secretary of State, who will reconsider the position and take a fresh decision.

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Court of Appeal reiterates limits of judicial review in the climate change context

January 17, 2023

In R. (on the application of Friends of the Earth Ltd) v Secretary of State for International Trade/UK Export Finance (UKEF) [2023] EWCA Civ 14 the Court of Appeal dismissed an appeal brought by Friends of the Earth relating to the Government’s decision to provide export finance in support of a natural gas project in Mozambique. In doing so, the court gave importance guidance on the role of the Paris Agreement on climate change in domestic judicial review cases.

Key points

  • The court cannot and should not second guess the executive’s decision-making in the international law arena where there is no domestic legal precedent or guidance.
  • When considering the lawfulness of a public law decision in the context of an unincorporated treaty such as the Paris Agreement, the standard of review in judicial review proceedings may be based on tenability and not correctness.

Background

Friends of the Earth (“FoE“) sought to appeal the dismissal of its application for judicial review of the Secretary of State’s decision to provide export finance in support of a natural gas project (the “Project“) in Mozambique. The decision was initiated by United Kingdom Export Finance (“UKEF“) in exercise of delegated powers. At first instance, the Divisional Court was split and the judicial review did not succeed (see our commentary on the judgment).

FoE appealed to the Court of Appeal. It raised the following issues:

  1. Whether it was an error of law for UKEF to have concluded that the decision was aligned with the UK’s obligations under the Paris Agreement;
  2. Whether, given UKEF had decided to finance the Project on the basis that funding was in accordance with the UK’s obligations under the Paris Agreement, the court should assess the lawfulness of that decision on the basis only of whether UKEF’s view was tenable, rather than correct;
  3. Whether the Court of Appeal should determine the proper construction of Article 2 (1) (c) of the Paris Agreement (which relates to making finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development); and
  4. Whether the respondents failed in their duty of enquiry under Secretary of State for Education and Science v. Metropolitan Borough of Tameside [1977] AC 1014 (“Tameside“) by not obtaining an accurate quantification of the Project’s Scope 3 emissions.

Judgment

In a single unanimous judgment, Sir Geoffrey Vos dismissed the appeal and addressed the issues raised by FoE fully in his judgment.

The Paris Agreement

Sir Geoffrey Vos held that the Paris Agreement did not give rise to domestic legal obligations as it is an unincorporated international treaty. The court did not agree with the comments made in the Divisional Court that the Paris Agreement consisted of “a composite package of aims and aspirations“, noting that it does contain specific obligations on states, but it is not helpful to seek to derive from the text hard-edged obligations of the kind found in commercial agreements.

For the purposes of this judgment the court did not consider it necessary to take any firm view as to the precise nature of the UK’s obligations under the Paris Agreement, but focused on what the UK was not obliged to do. Sir Geoffrey Vos concluded that Article 2 (1) (c) did not create an obligation on the UK to demonstrate that its overseas funding was consistent towards limiting global warming, but instead contained the aims and purposes of the Paris Agreement.

The question of whether funding the Project was aligned with the UK’s international obligations under the Paris Agreement was however accepted to be justiciable.

Tenability

The court held that the question of whether it was an error of law for the respondents to have concluded that funding the Project was aligned with the UK’s obligations under the Paris Agreement, was to be judged by the tenability standard rather than the correctness test, and provided an explanation of their approach.

The respondents here chose to take into account the UK’s obligations under the Paris Agreement but were not compelled by domestic law to do so. The court noted the lack of clear guidance as to how unincorporated treaties such as the Paris Agreement should be interpreted under domestic law. Sir Geoffrey Vos referred to the Paris Agreement as one of many factors that UKEF decided to consider when making their decision and emphasised that it was not for the courts to allocate “weight as between competing factors“. As an example, he outlined that if domestic courts had to definitively construe unincorporated treaties every time the executive decided to have regard to them in making decisions, it would be “problematic” and “unworkable”.

The court therefore found that the fact that UKEF had reached a definitive view that its decision was compliant with the UK’s obligations under the Paris Agreement (rather than saying it was simply tenable) had no effect on the outcome. The court explained that the executive can state that it wishes to comply with an unincorporated treaty even though there may be different views as to what precisely it means. The court went further and accepted that the executive “must also be able to say, without successful challenge, that it thinks on balance and in good faith that a particular decision is compliant, even if it later changes its policy or is shown to have been wrong in the view that it took“.

Rationality

FoE’s rationality challenge focused on the argument that the Government later acknowledged that financing the Project did not align with the UK’s obligations under the Paris Agreement.

Sir Geoffrey Vos explained that the uncertainty and complexity surrounding the Project made it clear that UKEF could not predict a precise outcome. In particular it was not clear to what extent the Project would contribute to fossil fuel transition. He observed that UKEF had to consider all relevant and material factors when making their decision which included the UK’s obligations under the Paris Agreement.

The court held that the correct standard to apply was whether UKEF’s view that the decision aligned with the UK’s obligations was tenable when it was taken (not with the benefit of hindsight). There was no requirement to be certain that the decision complied with those obligations. It would be unworkable and impracticable if the Government could only make such a decision if it were able to demonstrate that its view of the factual and legal position was correct.

In light of the complexity of the case, the court found that UKEF’s view was indeed tenable and therefore it was not irrational for UKEF to decide to provide finance for the Project.

Tameside challenge

The court referred to Thornton J’s approach in the Divisional Court, where she considered that the failure to quantify the Scope 3 emissions meant “that there was no rational basis by which to demonstrate that funding for the project was consistent with Article 2 (1) (c)”, and described it as flawed on the basis that Article 2 (1) (c) does not impose an obligation on the UK Government with which compliance must be demonstrated.

Noting that it was for the decision maker to decide upon the manner and intensity of the inquiry to be undertaken, Sir Geoffrey Vos stated that the ultimate question for the court was whether it was irrational for UKEF to have taken the funding decision without accurately quantifying the Scope 3 emissions, in a context where it was always fully understood that the Scope 3 emissions were significantly larger than the other categories of emissions. Sir Geoffrey Vos noted that the precise quantification of the Scope 3 emissions did not answer the important questions of whether and to what extent gas from the Project would replace more polluting fossil fuels or whether financing would or would not align with the UK’s obligations under the Paris Agreement.

The court held that UKEF’s decisions as to the quantification of the Scope 3 emissions were within the substantial margin of appreciation given to decision-makers. The court concluded that despite failing to estimate the scope 3 emissions accurately, the decision was not irrational.

Comment

This is an important judgment on the standard of review the courts will apply when asked to consider unincorporated international law and the broad margin of discretion afforded to public bodies when deciding complex and uncertain issues.

The judgment also serves as a strong reminder of the high bar of success for judicial review applications despite the growing relevance and appreciation of climate change-related issues. Indeed the judgment started with a reminder that it should not be construed as supporting or opposing any political view, but was focused only on establishing whether the decision was vitiated by an error of law. Regardless of the context, judges are expected to restrict themselves to applying accepted and familiar principles of public law.

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Administrative Court indicates that a privately owned airport operator may be amenable to judicial review

January 16, 2023

In R. (on the application of Doncaster MBC) v Doncaster Sheffield Airport Ltd [2022] EWHC 3060 (Admin), the Administrative Court has indicated that it is “arguable with a realistic prospect of success” that a decision made by a privately owned airport operator, Doncaster Sheffield Airport Limited (the “Operator“), to close Doncaster Sheffield Airport, is amenable to judicial review.

Key Points

  • Case law supports the proposition that a privately owned airport operator can in principle be found to be discharging public functions.
  • The discharge of public functions attracts public law’s basic standards of lawfulness, reasonableness and fairness and renders a decision amenable to judicial review.
  • A privately owned airport operator arguably discharges a public function amenable to judicial review when making a decision to close an airport.

Background

The judicial review concerned the Operator’s announcement on 26 September 2022 to close Doncaster Sheffield Airport, on the basis that the aviation services were no longer commercially viable (the “Decision”).

Prior to the September announcement, the Operator conducted a Strategic Review of options for the airport, including a consultation and engagement programme with stakeholders. The claimant, Doncaster Metropolitan Borough Council (the “Council“), was actively involved in the consultation and strongly opposed the airport’s closure.

The Operator sought to raise a number of “knock-out” points at the oral permission hearing, in particular arguing that the decision was not amenable to judicial review, the claimant lacked standing and there had been delay.

Judgment

Amenability

The Operator submitted that the Decision was not amenable to judicial review because the Operator was a private company acting at all times as a private entity and not discharging a public function. Drawing an analogy with R (Liberal Democrats) v ITV Broadcasting Ltd [2019] EWHC 3282 (Admin), the Operator pointed out that the private body’s activities were purely commercial notwithstanding that they were provided to the public at large; the source of the powers and duties derived from a memorandum and articles of association not from statute; the activities were not monopolistic and the function was not intrinsically governmental or quasi-governmental.

Although that was said to be a powerful line of argument, the court found that it was arguable, with a realistic prospect of success, that the Operator was, in its decision making regarding closure of the airport, discharging a public function amenable to judicial review and attracting public law’s basic standards of lawfulness, reasonableness, and fairness. Arguability was the appropriate threshold at this stage as the court was only considering the issue of whether or not to grant permission for judicial review.

Fordham J noted case law which supports the proposition that a privately owned airport operator can discharge public functions. He also relied on the regulatory power conferred by Parliament under the Airports Act 1986 which empowers the Operator to make byelaws for regulating the use and operation of the airport. Fordham J considered that making or enforcing byelaws restricting access to the airport would be a sufficient public function for the purposes of amenability to judicial review. Against that background the court found it illogical to conclude that closing the airport down altogether would be a decision bereft of any sufficient public element.

Regard may be had to the “nature, context and consequences” of the decision. The airport was land used for a public purpose, the Operator was permitted to use the land as an airport in the public interest, and the Operator’s function was carried out in the national interest. Further, the decision affected substantial members of the public. The combination of these features persuaded the court that the decision was arguably amenable to judicial review.

Standing

The court found that the Council did not lack the sufficient interest required to challenge the Operator’s decision, as the airport fell within the Council’s administrative responsibilities and was a key infrastructure asset interwoven into the Council’s public and legally significant plans. Further, the Council was heavily represented on the Operator’s own consultative committee and was a key stakeholder during the Strategic Review.

Delay

The court was not persuaded that it should refuse permission for judicial review on the grounds of delay and a lack of promptness. Although the Council had placed itself on the outer limits of promptness by waiting 5 ½ weeks to issue its claim, it was actively involved in the engagement leading to the decision, and proactive in its attempts to deter the Operator. Just 2 ½ weeks after the Decision, the Council raised in correspondence that it was considering injunctive and public law remedies.

It is notable however that even though the judicial review proceedings were commenced within a matter of weeks, rather than months, Fordham J considered that the Council was “skating on thin ice” notwithstanding the understandable approach of focusing resources on other solutions and turning to the lawyers to draft a claim only as a ‘last resort’. Despite all this, Fordham J considered that there had been a delay of a nature capable of having consequences in relation to any question of interim relief.

Grounds for judicial review

There were a number of different grounds for judicial review advanced, including in relation to the consultation process, predetermination, substantive unreasonableness and unlawful delegation. However, the court found no viable ground for judicial review crossing the threshold of arguability with a realistic prospect of success. Permission for judicial review was therefore refused.

Comment

This judgment, although only at the initial permission stage, is notable in confirming that decisions made by privately owned airport operators may potentially be amenable to judicial review. When exercising their powers regarding the running of aviation services, operators may be discharging public functions. Although the issue of whether or not a particular decision will be amenable to judicial review is highly fact and context specific, this judgment serves as a reminder to private organisations functioning in an area of public interest, both in aviation and other sectors, that they are not necessarily exempt from public law’s basic standards of lawfulness, reasonableness, and fairness.

The approach of the court on the delay issue is also striking and emphasises the need for claimants who are considering challenging public law decisions to move with the utmost urgency.

Andrew Lidbetter
Andrew Lidbetter
Partner
+44 20 7466 2066

Nusrat Zar
Nusrat Zar
Partner
+44 20 7466 2465

Jasveer Randhawa
Jasveer Randhawa
Professional Support Consultant
+44 20 7466 2998