Those dissatisfied with the decisions of a public body can use judicial review ('JR') to determine whether something illegal, irrational or unfair occurred in the decision-making process.

JR has been used against taxation authorities, the media, utilities and financial service regulators (the BCC, the DGES, SIB, PIA, Pensions Ombudsman and SFO), professional bodies (the Law Society, ICCA, Bar Council, medical, pharmaceutical and dentists' bodies), bodies awarding licences, franchises and grants, and various government departments and agencies engaged in regulation (DGFT, MMC).
 

The public/private divide

Judicial review is only available in respect of public law matters. Yet it may be an abuse of court to use private law where the issue under challenge is properly amenable to review. Much time and money has been spent re-drawing the procedural dividing line, but recent cases (British Steel, Mercury, Sheffield CC) all suggest that where the issues savour of private law rights (in restitution, or to a salary or grant, upon satisfaction of certain conditions), the courts will no longer force parties up the public law route. However, JR may still offer advantages.
 

Public law bodies

The exercise of statutory functions, or functions which are 'governmental', will be reviewable. Statutory underpinning (eg mere acknowledgement of the existence of some non-statutory body) may suffice. The absence of any real choice but to submit to a non-statutory body's jurisdiction, if one wants to do business, may also suffice.

The adventitious existence of an apparently private body who is, in fact, willing to perform a governmental function, ought not to prevent JR, especially since arguably public functions are increasingly carried out by bodies constituted in private law. It has even been suggested that privatised utilities may be amenable to JR, in some respects.

Regardless of the particular function being challenged, the existence of a contractual remedy against a body may preclude JR (eg Lloyd's, the Insurance Ombudsman), while providing remedies against unfairness in private law. But the Ross proceedings showed that non-members of SROs needed further protection through JR and the same would apply to any member suggesting that a regulatory body's rules were themselves, ultra vires.
 

The Public Law Domain

The challenged decision must also be in the public domain and not about aspects of a public body's 'everyday' decisions about employees, contractual powers etc. Therefore in Cobleigh, the Council's refusal to sell land was not amenable to review.
 

Locus standi and capacity

The case of 'Brake' makes it likely that no legal personality is required. Anyone who has 'a sufficient interest' may commence JR. An applicant does not have to show the kind of damage required for contract, property or negligence cases. Types of connection found sufficient range from moral and public-spirited concerns, to geographical, financial and competitive interests. The recent Dixon case held that even if the applicant had no greater interest than members of the general public, he would not thereby lack standing. The threshold for locus at the leave stage is set only so high so as to prevent abuse. Only having 'no interest whatsoever' justifies the denial of leave. If an arguable case of misuse of power is made out at the leave stage, the court's only concern is to ensure that it is not being done for an ill motive. The nature and strength of the interest may be more relevant in the court's approach to the grant of relief.

Third parties may also get involved, if they are 'directly affected' (see Muldoon for circumstances in which the Minister was not allowed to intervene) and may put in evidence and make submissions. Typically, third parties benefiting from a decision, now under challenge by a disgruntled competitor, might intervene in this way.
 

Advantages – speed, flexibility and negotiating power

•Proceedings last 18 months on average, but may be completed within a very short time in an urgent case. The decision in the Datafin case took from 24 November (Take-over Panel's decision) to 5 December 1986 (decision of the CA). •A written application and an affidavit are all that is needed to apply for leave. •The procedural regime under Order 53 RSC is flexible: proceedings may be continued as if begun by writ, and there is scope for expedition, discovery and cross-examination. Interim relief principles are also developing quickly. •Partial relief may be given, including severance. Sometimes a judge will make it clear that illegality has occurred, but relief will be denied, so that the accrued effects of the decision are not overturned, but the law is clarified for the future (Argyll). •Furthermore, 'friendly' actions are not unknown, where the parties co-operate to obtain clarification of ambiguous legislation. •Security for costs has recently been obtained by a pharmaceutical body, when it was challenged on a statutory appeal (Kansal). •The equivalent of a strike-out application exists by way of an application to set aside leave, if the respondent establishes that the application will clearly fail at the full hearing. Luton BC recently succeeded in overturning leave for a taxi driver who had argued Article 30 grounds, with regard to the refusal of a licence. The council's policy could not possible amount to a quantitative restriction because it applied to all traders, regardless of their origins. •The stakes are often so high that it is worth commencing proceedings, notwith-standing that the number of successful applications at the final hearing stage is lower than in other fields involving JR. •Interestingly, the percentage of successful leave applications is higher than the average. Getting past the leave hurdle can often provide useful publicity for commercial entities. •Many applications are eventually withdrawn after leave is granted, as a result of further negotiations, although an applicant's costs are not always allowed simply because the respondent has changed its mind (see Church of Scientology).
 

Disadvantages – time limits, good faith requirement, alternative remedies, unpredictability and futility

•The maximum 3-month time limit and the law on what qualifies as a prompt application, mean that applications must be commenced quickly. Niche expertise and attention to detail can be costly in large and complicated matters. •The effect of delay on third parties (or the administration) will influence the court in either extending the time limit for good reason, or declining leave on the grounds of lack of promptness. Delay proved fatal, notwithstanding the likelihood of illegality, in the DTF case. There, a highly arguable challenge to the Milk Marque Scheme would have had far-reaching consequences. Even though the application was made just within the time limit, leave was refused. Conversely, in the NFU case, where UK regulations concerning quota were found to be unlawful and disproportionate under EU law, the claims were out of time. The case proceeded because it was held that the grant of relief would not inevitably cause chaos in the industry. •The requirement, at the leave stage, of utmost good faith, upon affidavit, puts a heavier burden of disclosure on the applicant and his advisers than would be the case at a similar stage in private law proceedings. •Alternative remedies must usually be exhausted first, partly in order to reflect Parliament's intention that specialist bodies should control specific types of disputes, and partly to keep the JR lists moving (see Capti-Mehmet). This may prove particularly difficult to surmount in taxation matters, or where Parliament has provided procedures for appealing against regulators' findings. •A party can succeed at the leave stage, and at the full hearing, but still be denied a remedy, in the court's discretion. •Even more frustrating must be to obtain a remedy, and then find that the public body makes the same decision second time around, on lawful grounds or by way of a fairer procedure. This happened in the Tobacco Securities case where the company established that it had not been given an adequate chance to make representations as to why its manufacture of oral snuff sachets should be continued. The ban was confirmed later, after the medical evidence relied on by the authorities had been properly disclosed. •Interim relief is very rarely granted, even where a decision as to the legality of UK or EU legislation depends on a reference to the ECJ. A recent example where the applicant failed in this regard is British Telecommunications plc. The court took into account that BT was a hugely successful company and that its losses, if the national regulations remained in force, pending a ruling, would only dent, rather than destroy it. •Further, it is very unusual for a JR court to award damages at the final hearing, unless the wrong made out is a breach of EU law (in Francovich circumstances) or some other private law wrong, such as a recognised tort or trespass.
 

Recent examples of JR in the commercial arena

Illegality

In International Traders' Ferry Ltd, the company established that a decision to reduce police presence in a port area suffering disturbance, was unlawful, because it amounted to a measure having equivalent effect to quantitative restrictions on exports under EU law. The CA held, however, that proper policing was obviously an aspect of public policy and that even if the police had acted in contravention of Article 34 or disproportionately, they were entitled to rely on Article 36.

Unreasonableness

In IFA's Association, pensions mis-selling guidance from the SIB was challenged for unreasonableness. The application was dismissed because it was not possible to say that the guidance required IFA's members to take action which would invalidate their liability insurance. Later, in a JR of the PIA's implementation of the SIB's guidance, the court held that since the PIA has such wide discretion in deciding what it should do in the interests of the industry, and given the crisis brought about by the mis-selling scandal, it was difficult, if not impossible, to say that the regulator had acted irrationally (Lucas Fettes).

Irrelevant considerations

In Kingston upon Hull, the Minister had purported to establish the outer estuarine limits of the Humber and Severn Estuaries under UK Waste Water Regulations. The decision-maker had asked himself whether secondary sewage treatment would be an appropriate use of resources and then moved the boundary to give effect to his conclusion that it would not. The court held that salinity was a relevant consideration, but that costs consequential upon the designation were not.

Fairness

In Paddock, the court held that giving 6 days' notice to street traders of a hearing to investigate corruption allegations was not unfair. Adequate notice depended on the extent of the issues and evidence to be canvassed. In this case the applicants had had notice of the case against them for 2 years and had known for one month that they risked disqualification from trading.

In Milner, the court again considered the requirements of natural justice by reference to the nature and effect of the decision being challenged. The determination of this particular body was not a finding of wrongdoing, or a punishment, nor did it revoke some long-standing right of the applicant related to his livelihood. It merely frustrated the applicant's ambition to specialise in plastic surgery, without rendering him jobless. In the circumstances, the duty of confidentiality owed to professional referees was not to be overridden.

In Moore, a FHSA refused to accept written representations from doctors about an application to open a chemist's shop nearby, notwithstanding the fact that the relevant regulations required the authority to have regard to any available information it considered relevant. A further regulation gave a right to anyone who thought they may be affected by such sales, to make written representations. The court held it was so obvious that the doctors' views would be relevant, that any opinion to the contrary, might well be regarded as perverse. Given the fact that the doctors would lose the right to provide a pharmacy themselves, if the chemists' applications were accepted, no-one with any sense of fairness could refuse to consider their information.

Legitimate Expectation

In Unilever plc, the Revenue had allowed a company to operate an extra-statutory procedure for the assessment of company profits which had worked harmoniously for many years. Suddenly the Revenue objected that no claim for loss relief had been made within 2 years of the end of the accounting period, as required by statute, and refused in its discretion to allow relief to be claimed out of time. The court held that the rejection of the company's claims was so unfair as to amount to an abuse of power and irrationality.
 

Conclusions

JR is specially significant for business, industry and the professions, because of the increase in regulation of these sectors, and because it provides a weapon for use by or against competitors. Courts tend to take a strict approach to allegations of illegality, a flexible one to procedural fairness cases, and a more generous approach to respondents challenged on the basis of unreasonableness. Arguments in favour of a generous approach are that regulators must act with speed and certainty, and that even the possibility of recourse to the courts creates lack of confidence in the market. These have not found favour, so far as amenability to review is concerned, but they have affected the courts' approach to discretionary matters, such as the implications of delay, the grant of interim and final relief and, of course, costs.

Even an unsuccessful JR may have a significant ripple effect, and the procedure should be regarded as part of the extended armoury of every litigator.

Belinda Schwehr – Rowe & Maw's Public Law Group

This article first appeared in the October 1997 issue of The In-House Lawyer, published by Legalease.

© Rowe & Maw 1997